Critical Success Factors For Erp Adoption Process

CRITICAL SUCCESS FACTORS FOR ERP
ADOPTION PROCESS
Case: Vietnam Dairy Products Joint Stock Company
LAHTI UNIVERSITY OF APPLIED

SCIENCES
Degree programme in Business Information
Technology
Thesis
Spring 2011
Nguyen, Huu Vinh
Lahti University of Applied Sciences
Degree programme in Business Information Technology
NGUYEN, HUU VINH: Critical Success Factors for ERP

Adoption Process
Case: Vietnam Dairy Products Joint Stock
Company
Bachelor‟s Thesis in fulfillment of the Bachelor of Business Information

Technology, 65 pages, 9 pages of appendices.
Spring 2011
ABSTRACT
Since Vietnam officially joined WTO in 2007, many organizations have been
increasing their needs in restructuring their operations and seeking for a total
business solution as a significant strategic tool of competition. Enterprise
Resource Planning (ERP) system is designed to meet this need; however, there
have been many failed attempts at implementing an ERP system. The aim of
this research is to examine what critical success factors impact on the ERP
adoption process.
The thesis chose Vietnam Dairy Products Joint Stock Company (Vinamilk), a
leading company in manufacturing dairy products in Vietnam, as the case
company. Data was collected from different sources such as interviews, the
project‟s documentations, the company‟s reports and small-scale survey.
The results indicate the critical success factors for the ERP adoption of
Vinamilk. Therefore, this study is beneficial to other Vietnamese companies‟
managers who plan to invest in ERP projects. Besides, this paper can be
beneficial to those managers who failed to manage the ERP adoption process.
Next, the findings are good reference for novice consultants who need in-depth
knowledge of ERP. Finally, this thesis is helpful to those who are interested in
ERP adoption in Vietnam.
Keywords: Enterprise Resource Planning (ERP), Critical Success Factors

(CSFs), ERP adoption process, ERP implementation success, Vietnam.
ACKNOWLEDGEMENTS
Throughout this bachelor thesis, there are many people that I would like to
acknowledge for their continuing support and valuable advice.
Foremost, I would like to express my huge gratitude to my supervisor,

Professor Torsti Rantapuska of Lathi University of Applied Sciences for
believing in me and guiding me during the work. It has been an honor to be
your student and I could not have done this study without you and your
insights. Your expertise and competence is tremendous.
Secondly, I would like to thank lecturer Keith O‟Hiobhaird and lecturer Antti
Salopuro for improving my research‟s quality in both language and format.
Next, I would like to thank the interviewees for taking their precious time and
providing valuable empirical foundation in order for me to conduct this
research.
Finally, I would like to thank my family and my friends for caring and helping
me during the entire process of doing this research.
March 2011
Nguyen, Huu Vinh
CONTENTS
1 INTRODUCTION 1
2 RESEARCH APPROACH 3
2.1 Research background 3
2.2 Research question and objectives 5
2.3 Scopes and limitations 5
3 RESEARCH METHODOLOGY 7
3.1 Research purpose 7
3.2 Research strategy 8
3.3 Choice of method: qualitative or quantitative? 9
3.4 Data collection 9
3.5 Data analysis 12
3.6 Validity and reliability 13
4 ERP SYSTEMS 14
4.1 ERP definition 14
4.2 Benefits of implementing an ERP system 15
4.3 ERP adoption process 15
4.4 ERP implementation approach 18
4.5 ERP implementation success and why it is critical 20
5 REVIEW ON CRITICAL SUCCESS FACTORS IN ERP

ADOPTION 22
5.1 Critical success factors approach 22
5.2 CSFs for ERP adoption 23
5.3 Conceptual framework 29
5.4 Discussions on identified CSFs 30
5.4.1 Visioning and planning 30
5.4.2 Top management support and commitment 31
5.4.3 Change management 32
5.4.4 IT infrastructure 33
5.4.5 ERP teamwork and composition 33
5.4.6 BPR and minimal customization 35
5.4.7 External competence and partnership 36
5.4.8 End-users: involement, education and training 37
6 CASE STUDY 39
6.1 Company background 39
6.2 ERP project description 39
6.2.1 Decision planning phase 41
6.2.2 Acquisition phase 42
6.2.3 Implementation phase 43
6.2.4 Use and maintenance phase 47
6.3 CSFs analysis 48
6.3.1 Visioning and planning 48
6.3.2 Top management support and commitment 50
6.3.3 Change management 51
6.3.4 IT infrastructure 52
6.3.5 ERP teamwork and composition 53
6.3.6 BPR and minimal customization 55
6.3.7 External competence and partnership 56
6.3.8 End-users: involvement, education and training 57
6.4 Statistical results 58
7 SUMMARY AND RECOMMENDATIONS 60

7.1 Summary 60
7.2 Discussion and recommendations 61
7.2.1 Discussion of the method 61
7.2.2 Recommendations 61
7.3 Further research studies 65
REFERENCES 66
APENDICES 77
LIST OF ABBREVIATIONS
BI Business Intelligence
BPC Business Process Change
BPR Business Process Reengineering
CSFs Critical Success Factors
ERP Enterprise Resource Planning
IS Information System
IT Information Technology
M Million
ROI Return on Investment
Oracle EBS Oracle E Business Suite
SMEs Small and Medium sized Enterprises
UML Unified Modeling Language
US The United States
WTO World Trade Organization
LIST OF FIGURES
FIGURE 1. Convergence of multiple sources of evidence. 10

FIGURE 2. Components of qualitative data analysis – Interactive model. 12
FIGURE 3. Anatomy of an ERP system. 14
FIGURE 4. An ERP adoption process. 16
FIGURE 5. Linkages between organization size and complexity and
implementation approach used. 19
FIGURE 6. Linkages between organization hierarchy and control and
implementation approach used. 19
FIGURE 7. ERP implementation success model. 21
FIGURE 8. A critical success factors model with strategic and tactical
factors. 24
FIGURE 9. Classification of CSFs in the ERP adoption process. 28
FIGURE 10. The conceptual framework. 29
FIGURE 11. ERP implementation success applied. 40
FIGURE 12. Collecting money process in the accounts receivable module of
the Oracle EBS system. 45
LIST OF TABLES
TABLE 1. Provided details of main interviewees. 11

TABLE 2. Sample group for interviews. 11
TABLE 3. Frequency analysis of CSFs in literature. 25
TABLE 4. Review on CSFs for ERP adoption. 26
TABLE 5. Plan for implementing the Oracle EBS system of Vinamilk. 44
TABLE 6. Actual results after successful implementation. 46
TABLE 7. Factor 1 – Visioning and planning. 48
TABLE 8. Factor 2 – Top management support and commitment. 50
TABLE 9. Factor 3 – Change management. 51
TABLE 10. Factor 4 – IT infrastructure. 52
TABLE 11. Factor 5 – ERP teamwork and composition. 53
TABLE 12. Factor 6 – BPR and minimal customization. 55
TABLE 13. Factor 7 – External competence and partnership. 56
TABLE 14. Factor 8 – End-users: involvement, education and training. 57
TABLE 15. Frequency of CSFs in the Vinamilk‟s ERP project. 59
12
2
l
k
1 INTRODUCTION l
k
In a fiercely competitive business environment as today, business strategy plays a l
crucial role in both determining success and governing business survival. An k
effective business strategy should focus on intensive and efficient use of l
information technology, such as Enterprise Resource Planning (ERP) systems. Ank
ERP system is a strategic tool that integrates all data and business processes from k
different departments into one single computer system. Therefore, the ERP systeml
is the very infrastructure of how business operates and it is also the platform for k
future business expansion (Dave Caruso 2003, 1). l
k
This study deals with the question of what are the critical success factors (CSFs) l
for adopting an ERP project or how to adopt the ERP project successfully. k
Instantly, you may think that this thesis is only useful for those persons that are 2
directly involved in ERP projects such as project managers, top managers or 2
technical staffs. However, this topic also concerns a wide range of people. 2
2
First of all, the topic is a specific example of the question of how to do a task
successfully that we usually face in real life. Through this study, you may realize
the importance of what are so-called „critical success factors‟ in planning your
tasks. Second, ERP systems are currently a trend and have been widely
implemented by various organizations such as governmental agencies, companies
and even Universities. It means that your future jobs may be involved with ERP
systems, so why not to get familiar with their concepts from now? Furthermore,
ERP projects are costly and time-consuming. Their successes or failures can have
impact on not only organization‟s operations but also its entire staffs. Therefore,
finding the answers to how to adopt ERP systems successfully is extremely
important. This study is an effort to achieve that by identifying the CSFs for
adopting ERP systems which corresponds with Vietnamese companies,
categorizing them into the respective phases in the ERP adoption process model,
and examining the importance of these factors in the real ERP project in Vietnam.
2
This research is divided into seven chapters: introduction, research approach,

research methodology, ERP systems, review on CSFs in ERP adoption, case study
and summary and recommendations. Firstly, the introduction introduces you the
thesis‟s topic. Research approach provides the background of the problem,
motivations to do this research, its scope and limitations. Next, the research
methodology states how the research is processed to find the results. The fourth
chapter gives some focused areas of the ERP terminology used in this study such
as definitions, benefits, and its adoption process and implementation‟s tasks.
Fifthly, CSFs in ERP adoption provides definitions of CSFs, their findings in ERP
adoption projects in previous research studies and later; eight CSFs are identified
for discussion and further analysis in the case study. Later, the empirical data
collected is described and analyzed. Finally, summary and recommendations
summarize the whole research and its findings as well as give recommendations
and further research studies.
3
2 RESEARCH APPROACH
2.1 Research background
Nowadays, ERP systems have been widely implemented to obtain competitive

advantage for companies. The major ERP vendors are SAP AG, Oracle and
Microsoft. ERP systems help to improve business processes and reduce costs.
Furthermore, the system can connect with suppliers, distributors, and customers,
facilitating the flow of product and information. Nevertheless, there still exist
numerous challenges in adopting ERP systems.
In practice, implementing an ERP system is costly, time-consuming and complex.

According to the ERP 20101 report released by Panorama Consulting Group
(2010, 3), the average of ERP implementation took 18.4 months with total
owner‟s cost2 of 6.2 million of US dollars. In the same period, 35.5% of ERP
implementation took longer than expected, 51.4% of them went over budget and
40% of companies realized major operational disruptions after implementation go-
live.
In Asian developing countries, the rate of ERP adoption was very low and several
years behind advanced countries (Rajapakse & Seddon 2005, 1; Ngai et al. 2008,
12). Until February 2010, there were about 100 Vietnamese companies that
already adopted ERP systems, and the number was anticipated to increase
significantly. This result came from a report released on the website http://eac.vn
on March 2010 which was attached in appendix 1 at the end of this thesis. The
modest number above derived from the high failure rate of 70% - 80% of previous
ERP projects based on statistic in 2006 (ERP implementation projects: how to
avoid failure, 2006).
1
: The study surveyed respondents from nearly 1,600 organizations that had implemented ERP
systems within the last four years.
2
: The costs of the software, hardware, professional services (for ongoing maintenance, upgrades
and optimization) and internal costs depend on the number of users, complexity of the solution, the
ERP vendors and the implementation locations.
4
Thus, the difficulties and high failure rate in adopting ERP systems have been
widely attracted many researchers to discover critical success factors for ERP
adoption. Holland and Light (1999) are among the first authors to discuss the
issue (Holland & Light 1999, 31). Through comprehensive literature review, Ngai
et al. (2008, 14) indicate that much of the research focused on Western nations
while there has been lack of research on the success or failure of ERP adoption in
developing regions/countries. With the development of ERP systems, it becomes
more and more powerful with high risks. All the researchers wish to find some
successful factors to generalize experience. Beside, some other motivations for
exploring this topic are as following:
Firstly, ERP implementation projects in Vietnam are developing intensively: The

term ERP was known in Vietnam before the country joined WTO in 2007.
However, only after that moment did more and more companies realize their
needs of implementing ERP systems. There have been more companies pursuing
ERP systems as they grow more along with the Vietnamese economy.
Secondly, there is a need to enhance ERP adoption success in Vietnam: The

numbers of failed ERP projects in Vietnamese companies most dominated over
successful ones. Remarkably, some companies attempted to implement the ERP
system many times, but still unsuccessfully. This influenced on psychology of
other managers who planned to invest in the project for their companies.
Finally, ERP success and related critical factors: ERP adoption varies from size of
companies to geographical locations. Even though there have been many failed
ERP projects in Vietnam, formal efforts to determine their success and underlying
causes have been very limited. This paper aims to reduce the gap in literature
about CSFs in ERP adoption worldwide and more importantly, it aims to be one
of the first academic research studies on CSFs in ERP adoption in Vietnam.
5
2.2 Research question and objectives
Defining the research question is probably the most important step in a research
study (Yin 2003, 7). This study aims to find the answers for the question: What
are the critical success factors for the ERP adoption process?
The question is answered through the following methods:

- Conducting an in-depth literature review and developing theories for
analysis (deductive research).
- Collecting empirical data from the case study by interviewing different
participants joining the ERP project, project‟s documentation and
small-scale survey.
- Using within-case analysis where the data collected is compared to
theories.
- Finding the results
The main objective of this research is to examine the ERP adoption in light of
CSFs. Additionally, some secondary objectives are to:
- Have better understanding the ERP project in real life.
- Have better understanding the state of ERP adoption in Vietnam.
- Give recommendations and suggest future research topics.
2.3 Scopes and limitations
The scope of this study is to examine CSFs for the ERP adoption of the
Vietnamese company. In this thesis, the ERP adoption refers to the process from
deciding to implement the ERP system to using it in normal operations in the
company. Therefore, the implementation stage in the ERP adoption process is
mainly focused in description and analysis because it is the main stage that
influence on the success of ERP adoption. Likewise, both ERP implementation
success and ERP system success refer to the success of ERP adoption. This thesis
restricts its discussion and analysis on the proposed CSFs in literature reiview.
6
Since the case is a large organization in Vietnam, this study would be most
beneficial to other large Vietnamese companies. However, the findings can also
be helpful to SMEs since they have fewer obstacles in adopting ERP systems than
large ones. Moreover, this study is not limited in manufacturing industry because
CSFs discovered in this study are also applicable to other fields in the economy.
7
3 RESEARCH METHODOLOGY
Methodological insight gives an audience a better

understanding of previously conducted research and how to
proceed in future.
(Gammelgaard 2004, 480)
This chapter states how the research is processed to find the results. Research
purpose is discussed in the first section. Then, research strategy is explained in
section 3.2. Section 3.3 gives the choice of research methods. Next, the process of
collecting and analysis empirical data is described. Finally, validity and reliability
measures of this thesis are described.
3.1 Research purpose
In terms of research purpose, the threefold one of exploratory, descriptive and

explanatory is the most often used in the research methods' literature (Saunders et
al. 2009, 139). One research may have more than one purpose and the purpose
may also change over time (Robson 2002, according to Saunders et al. 2009, 139).
An exploratory study is used “to find out what is happening; to seek new insights;
to ask questions and to assess phenomena in a new light” (Robson 2002, 59).
Exploratory study is particularly useful to develop an initial and rough
understanding of a problem and it is applicable for new topic. It employs an open,
flexible and inductive approach to find all relevant data on the problem (Blanche
et al. 2006, 44).
A descriptive study is objected “to portray an accurate profile of persons, events

or situations” (Robson 2002, 59). It may be either an extension of a piece of
exploratory research or a piece of explanatory research (Saunders et al. 2009,
140). Descriptive research is often used to answer the questions who, what, where,
when and how.
An explanatory study is used to establish causal relationships between variables

and its analysis is on studying a situation or a problem in order to explain the
8
relationships between variables (Saunders et al. 2009, 140). Normally, this kind of
study answers the questions why and what.
With regard to this thesis, the research purpose is mainly explanatory and partly
descriptive. It is mainly explanatory because it explains how CSFs influence on
the success of the ERP adoption process. It is partly descriptive because it is
necessary to describe how the ERP system was implemented to have a clear
picture of the problem. Besides, this thesis is somewhat exploratory because the
author wishes to find out what was happening in the real ERP project in light of
critical success factors.
3.2 Research strategy
Along with research approach, it is important to pay attention to research strategy

that should be employed for the research. Saunders et al. (2009) consider seven
types of research strategy as following: experiment, survey, case study, action
research, grounded theory, ethnography and archival research (Saunders et al.
2009, 141). Each strategy can be used for exploratory, descriptive, or explanatory
(Yin 2003, 3). The choice of research strategy depends on the research question
and objectives, the extent of existing knowledge (Saunders et al. 2009, 141).
Particularly, the case study has considerable ability to generate answers to the
question why as well as what and how questions (Saunders et al. 2009, 146).
This thesis is designed as a case study because its purpose is to find information
relating to what question. A case study uses an empirical investigation of a
particular contemporary phenomenon within its real life context using multiple
sources of evidence, and provided an opportunity for the intensive analysis of
many specific details often overlooked by other methods (Robson 2002, 178;
Kumar 2005, 113). According to Yin (2003, 15), there are at least five different
applications of case studies: explanation, description, illustration, exploration and
meta-evaluation (a study of an evaluation study).
9
3.3 Choice of method: qualitative or quantitative?
By our pragmatic view, qualitative research does imply a

commitment to field activities. It does not imply a commitment to
innumeracy.
(Kirk & Milner 1986, 10)
Quantitative method is often used for numerical data collection technique

(questionnaires or structured interviews) or data analysis procedure (graphs or
statistics) that results in numerical data (Dawson 2002, 15; Saunders et al. 2009,
152). It is used either to quantify the variation in a phenomenon, situation, and
problem or to abstract from particular instances to seek general description or to
test causal hypotheses (Gary King et al. 1994, 3; Kumar 2005, 12).
In contrast, qualitative research explores attitudes, behavior and experiences

through such methods as interviews, observations, or focus groups to generate
non-numerical results. It attempts to get in-depth opinions from participants, so it
tends to take longer time than quantitative method (Dawson 2002, 15; Saunders et
al. 2009, 152.) Qualitative method is typically more flexible than quantitative that
it allows using open-ended questions rather than fixed ones. In that way, the
participants can respond in their own words. (Qualitative Research Methods: A
Data Collector‟s Field Guide, 4.)
Since there is lack of available data, qualitative method is most useful to the
context of this bachelor thesis. Qualitative method flexibly supports explorative
findings and in-depth knowledge of the current business practice (Gray 2009,
166). Additionally, quantitative data is collected as complementary tool for
illustrating the results.
3.4 Data collection
According to Yin (2003, 99), multiple sources of evidence and triangulation are
necessary for analyzing a case study. They can improve reliability and validity of
the case evidence. He also highlights that “those case studies using multiple
sources of evidence are rated more highly, in terms of their overall quality, than
10
those that rely on only single source of information”. In addition to theoretical

data from published sources, the empirical data consists of the following sources:
project documentation, company report, open-ended interviews and small-scale
survey. The data is collected on February 2011. Figure 1 below reveals the
convergence of multiple sources used in this single case study.
Project documentation
Open-ended
Company report FACT
interviews
Small-scale survey
FIGURE 1. Convergence of multiple sources of evidence (adapted from Yin 2003,

100).
Sample selection
The reason to choose Vinamilk as a case study is that the company is one of the
first companies in Vietnam implemented ERP successfully and the benefits of
ERP have been perceived. Moreover, the company reflects the common structure
of other large enterprises in Vietnam. Ultimately, the company can be easily
assessed to collect the empirical data.
Interview design
In this case study of Vinamilk, the interviews were conducted with several
different participants within the company as well as the ERP implementer. An
email interview with top managers and representative of the ERP implementer
was importantly defined as a series of emails; each contains a small number of
questions. The participants, based on the questions, expressed their thoughts and
opinions. However, there were some difficulties in approaching intended
11
interviewees. Therefore, telephone interviews were sometimes replaced for email

interviews. The data then was stored as notes for further analysis.
In order to set up interviews, the targeted company – Vinamilk – was contacted

and the participants responsible for the ERP project were identified. Below, list of
main interviewees is presented in table 1.
TABLE 1. Provided details of main interviewees.
Interviewee Organization Position

Ms. Ngo Vinamilk Ltd Vice president of Vinamilk,
ERP project supervisor
Mr. Tran Vinamilk Ltd IT manager, ERP project
manager
Mr. Nguyen Pythis Ltd Manager
In addition, small groups of cross-functional staffs participating in the project

were interviewed. For these groups, the interviews were done by emails and
instant messenger. Table 2 shows the details of sample groups for research.
TABLE 2. Sample group for interviews.
Department Number of interviewees

IT 3
Accounting 5
Manufacturing 3
Logistics 4
Total 15
The interview questions were designed based on the identified CSFs in literature.
It is also important to know the perceived benefits, possible challenges in using
the new system. Those questions were attached in appendix 2 at the end of this
12
study. Furthermore, a questionnaire was sent to all the interviewees to find out
how they evaluated the importance of identified CSFs to the success of the
project. It was presented in appendix 3 of this thesis.
3.5 Data analysis
One of the least developed and most difficult aspects of doing case studies is the
analysis of data collected. The best preparation for this task is to choose a general
analytic strategy (Yin 2003, 109). In this case study, the strategy used was within-
case analysis where the empirical data was compared with the theories or
identified CSFs. In addition, the quantitative data was analyzed for illustrating the
result.
Data collection
Data display
Data reduction
Conclusions:
drawing, verifying
FIGURE 2. Components of qualitative data analysis – Interactive model (Miles &

Huberman 1994, 10).
Firstly, the qualitative evidences were used to examine CSFs in the successful
project. The analysis includes data reduction, data display, and conclusion. Data
reduction was the process of selecting, focusing, simplifying, abstracting and
transforming the data. Its purpose was to organize the data, so that conclusions
could be drawn and verified. Data display was to take the reduced data and
displayed it in flowchart or other graphics that permitted conclusion drawing
easily. Finally, the tasks in conclusion drawing process were to decide what things
mean, note regularities, patterns, explanations, possible configurations, causal
13
flows and propositions. Figure 2 above illustrates the components of qualitative

data analysis. (Miles & Huberman 1994, 11.)
Secondly, quantitative data collected was then synthesized to find the frequency
of CSFs cited from small-scale survey. The purpose was to verify the importance
of the identified CSFs to the ERP adoption process of Vinamilk. Also, the result
indicated the most and least critical factors according to interviewees‟
perspectives. For this task, the statistical tool of Microsoft Excel was used.
3.6 Validity and reliability
Validity and reliability have to be considered to reduce the risk

of obtaining incorrect answers to research questions.
(Chisnall 1997, 12)
Validity and reliability are two valuable factors to measure the quality of a
research. Validity both concerns with whether the research conclusions are really
about what they appear to be about and refers to how well a specific research
method measures what it claims to measure (Chisnall 1997, 12; Saunders et al.
2009, 157). Reliability refers to the consistency of research findings. In other
words, if another researcher follows the same procedures, he should get the same
results. The goal of reliability is to minimize the errors and biases in a study (Yin
2003, 37.) It is important that all respondents understand the questions in the same
way and their answers can be coded without the possibility of uncertainty (David
Silverman 2001, 229.)
In order to deal with validity and reliability, this thesis used four sources of
evidence from the case study. All the chosen interviewees were well-involved in
the project, so their answers derived from their own experience. The time to
conduct interviews was also flexible and dependent on interviewees‟ schedule, so
they were comfortable to express their opinions. In addition, the list of references
was made to store all the sources from which the data was collected.
14
4 ERP SYSTEMS
This chapter provides some main background information about ERP systems
such as definition, benefits, and ERP adoption process and implementation
approach. It is also necessary to mention the success measurement for ERP
implementation and explain why implementation success is critical.
4.1 ERP definition
Wallace and Kremzar (2001, 5) define an ERP system as:
An enterprise-wide set of management tools that balances

demand and supply, containing the ability to link customers and
suppliers into a complete supply chain, employing proven
business processes for decision making and providing high
degrees of cross-functional integration among sales, marketing,
manufacturing, operations, logistics, purchasing, finance, new
product development and human resources, thereby enabling
people to run their business with high levels of customer service
and productivity and simultaneously lower costs and
inventories; and providing the foundation for effective e-
commerce.
In figure 3 below, the ERP system is the central database.
FIGURE 3. Anatomy of an ERP system (Davenport 1998, 124).

15
4.2 Benefits of implementing an ERP system
According to Röthlin (2010, 104), Shang and Seddon (2003) classify the benefits
of ERP systems into five dimensions with 21 sub-dimensions as following:
- Operational: ERP systems are built to integrate and automate business

processes. Therefore, they are expected to provide the benefits in terms
of cost reduction, cycle time reduction, productivity improvement,
quality improvement, customer service improvement.
- Managerial: ERP systems may help the company to achieve better
resource management, improved decision making and planning and
performance improvement.
- Strategic: ERP systems may support for strategic actions such as
business growth, business alliance, building business innovations,
building cost leadership, generating product differentiation (including
customization) and building external linkages (customers and
suppliers).
- IT infrastructure: ERP systems provide building business flexibility for
current and future changes, IT cost reduction and IT infrastructure
capability improvement.
- Organizational: ERP systems may support company‟s changes,
facilitate business learning, empowerment and building common
visions.
4.3 ERP adoption process
From literature review, it was noticed that there was no common viewpoints
regarding the stages of adoption process. According to Placide et al. (2008, 533)
the ERP adoption process has been identified between three and thirteen stages in
literature. According to them, the ERP adoption process contains seven stages:
decision, planning, search for information, selection, evaluation, choice and
negotiation. However, this model cannot reflect the true meaning of the ERP
adoption process.
16
Next, Pastor and Esteves (1999, 3) propose six phases for the lifecycle of adopting
an ERP system: decision planning, acquisition, implementation, use &
maintenance, evolution and retirement. In this thesis, the author proposes that
ERP adoption in a company is a process from realizing the needs for a new ERP
system, replacing old system(s) by that new system and obtaining intended
benefits through using it in normal operations. Accordingly, the new model
consists of four phases adapted from Pastor and Esteves (1999): decision
planning, acquisition, implementation and use & maintenance. Figure 4 illustrates
the ERP adoption process used in this study.
Decision Acquisition Implement Use &

planning ation maintenance
FIGURE 4. An ERP adoption process (adapted from Pastor & Esteves 1999, 3).
Decision planning phase

This stage presents the business vision and planning of organization. Top
managers have to fulfill the following activities. Firstly, they must analyze the
needs and requirements for adopting an ERP system. Secondly, they should
analyze the costs and expected benefits from ERP adoption. Lastly, feasibility
study is needed to determine tentative impacts on the organization. (Pastor &
Esteves 1999, 4.)
Acquisition phase
The acquisition team is formed to choose the ERP package that best fits the
requirements of the organization so that customization would be minimized. An
ERP implementer is also selected. Terms and conditions in implementing contract
are defined. It is also important to make an analysis of the return on investment
(ROI) of the selected ERP package. Another important task is to investigate and
evaluate the current IT infrastructure of company to consider whether it satisfies
the requirements of the new ERP system or not. (Pastor & Esteves 1999, 4; Pastor
& Bibiano 2006, 3.)
17
Implementation phase
This stage is the most important phase in the ERP adoption process where the
ERP system and business processes of the organization match each other. The
role of consultants is so crucial in this stage because they provide implementation
methodologies, know-how knowledge and training. (Pastor & Esteves 1999, 5.)
According to Theodor (2009, 14), some main tasks in this stage contain:
- Formation of project team: consist of project manager, IT personnel,

and end-users from all related departments/ levels, ERP consultant and
steering committee that supervise the progress.
- Preparation of implementation plan: a plan outlines the whole
implementation process: goals, objectives of the system, timeline, cost
and personnel resource, etc.
- Gap Analysis: this step is designed to compare as is and to be analyses
to determine what gaps exist between current company‟s processes and
new processes that they want to have.
- Business Process Reengineering (BPR) and customization:
reengineered business processes are mapped on to the software; if
possible make use of the standard functionalities the software offers,
otherwise apply gap analysis
- Create master data: all key information is standardized and unified.
- Set up application, configuration and integration: the ERP system is
installed and configured; then all modules are integrated.
- System integration testing: important step that eliminates software bugs
and other problems.
- Data conversion or data migration: data is transferred from old systems
to the ERP system in appropriate format and sequence.
- Go live: the ERP system functions properly and replaces old systems.
- User training: end-users are trained to know how to use the new
system.
18
Use and maintenance phase

This stage contains continuous user training, implementation evaluation, user
satisfaction and usage intention. In this stage, benefits of the system are perceived.
It also covers the report to analyze the expected ROI. Once a system is
implemented, it must be maintained because of malfunctions, special optimization
requests, and general systems improvements. (Pastor & Esteves 1999, 5; Pastor &
Bibiano 2006, 5.)
4.4 ERP implementation approach
Big bang and phased are the two primary approaches for implementing an ERP
system. A big bang approach is a deployment where at once old systems at all
locations are upgraded to the new ERP system. In contrast, a phased approach is a
deployment where modules of the ERP system are implemented in a sequence to
replace the old systems gradually. (O‟Leary 2000, 151.)
The choice of implementation approach depends on organizational characteristics

such as size, structure, complexity and controls of the organization. Often the big
bang is suitable to smaller and less complex organizations whereas the phased
approach is most used by larger and more complex ones. Besides, the more
hierarchical (tall) with tighter controls an organization becomes, the more likely
the phased approach is used. Figure 5, 6 below show the linkages between
organizational characteristics and implementation approach used. (O‟Leary 2000,
157, 158.)
19
Organization Complexity
Complex
Phased
Simple
Big Bang
Small Large
Organization size
FIGURE 5. Linkages between organization size and complexity and

implementation approach used (O‟Leary 2000, 157).
Organization Structure
Phased
Tall
Flat
Big Bang
Loose Tight
Extent of Controls
FIGURE 6. Linkages between organization hierarchy and control and

implementation approach used (O‟Leary 2000, 158).
As compared with the big bang, the phased approach takes longer implementation
time, higher total cost but lower risks, less personnel resource required during
implementation. In addition, by using the phased approach, old systems can go
back in case of the new ERP system would not work as expected and personnel
can accumulate knowledge in one phase to improve the tasks in later phases.
(O‟Leary 2000, 153.)
20
4.5 ERP implementation success and why it is critical
Companies can obtain a number of benefits through successful ERP

implementation. On the contrary, the project can be a catastrophe for those
companies that fail to manage the implementation process (Holland & Light 1999,
30.) Hence, the arising problem is to discover what characteristics define a
successful ERP implementation.
Previous research studies show that the definition and measurement of the ERP
adoption success is a thorny issue. According to Samiaah et al. (2010, 3),
Atkinson (1999) proposes „the triangle model‟ for project success. His model
consists of three factors in each angle, namely time, cost and quality. However,
these basic criteria have been criticized because of being inadequate.
According to Esteves (2004, 37), some authors indicate that success depends on
the viewpoints from which one measures it. For example, on time and within
budget are often the success measurement of project managers and
implementation consultants. However, business managers and end-users tend to
focus on having a smooth transition to stable operations with the new system,
achieving intended business improvements like inventory reductions, and gaining
improved decision support capabilities.
More generally, according to Ifinedo (2008, 554), Ifinedo (2006a, b) and Ifinedo
& Nahar (2006) proposed an ERP system success measurement model based on
an extensive literature review and case studies. Their model includes system
quality, information quality, individual impact, workgroup impact and
organizational impact as presented in figure 7 below. In this thesis, the author
adopts the viewpoint of Ifinedo and Nahar.
21
System quality
ERP Information quality
Systems Individual impact
Success Workgroup impact
Organizational impact
FIGURE 7. ERP implementation success model (Ifinedo 2008, 554).
All in all, ERP systems are commercial software packages that may cover all
activities of an organization. Since the system touch many aspects of a company‟s
internal and external operations, its successful deployment and use are critical to
its performance and survival. In some unsuccessful cases, the ERP project led
them to bankruptcy proceedings and litigations (Bicknell 1998, 3).
Moreover, implementing an ERP system is expensive, complex and too risky. In

fact, 65% of executives believe that ERP systems have at least a moderate chance
of hurting their business because of the potential for implementation problems
(Umble & Umble 2002, 26). Despite of experiencing in information system (IS)
implementation, those companies planning for the ERP project should take care of
all aspects that may occur during the implementation stage.
22
5 REVIEW ON CRITICAL SUCCESS FACTORS IN ERP ADOPTION
This chapter provides some background information in the areas of CSFs in ERP
adoption. Firstly, some definitions of CSFs are given. Then, theirs findings in
literature are reviewed. Next, conceptual framework is illustrated. Finally, CSFs
are discussed for further analysis.
5.1 Critical success factors approach
Daniel (1961) was the first author developed the concept of critical success factors
as a basis for determining the information needs of managers (Amberg et al. 2005,
2). The idea was then popularized by Rockart (1979) and has since been used
widely to help businesses implement their strategies and projects. He defined that:
CSFs are the limited number of areas in which results, if they

are satisfactory, would ensure successful competitive
performance for the organization. They are the few key areas
where things must go right for the business to flourish. If results
in these areas are not adequate, the organization’s efforts for
the period would be less than desired.
(Rockart 1979, 85)
He also summed up that CSFs are “areas of activity that should receive constant
and careful attention from management”. According to Pinto and Slevin (1987),
CSFs are “those factors which, if addressed, would significantly improve project
implementation chances” (Pinto & Slevin 1987, 22). Peffers et al. (2003, 55)
indicate that:
Senior managers have found CSFs to be appealing for IS

planning because they help justify the development of
strategically important new systems, the benefits of which may
be hard to quantify
In the context of ERP, CSFs for ERP adoption are defined as “factors or
conditions that must be satisfied to ensure a successful ERP adoption” (Holland &
Light 1999, 31; Finney & Corbet. 2007, 330).
In other words, identification of CSFs is essential for organization to achieve the

mission and strategic goals of its business or project. Whereas the mission and
23
goals focus on the aims and what is to be achieved, CSFs focus on the most
important areas and get to the very heart of both what to be achieved and how to
achieve it.
The term CSF was initially used in data analysis and business analysis. Since
then, it had been used extensively by various areas. In information system (IS)
discipline, this CSF method helps CEOs specify their own needs for information
about issues that are critical to the organization so that systems can be developed
to meet those needs. According to Williams & Ramaprasad (1998), “there is a
great deal of attention devoted to the concept in the IS literature as many argue
that the use of CSF can have a major impact on the design, development, and
implementation of IS” (Williams & Ramaprasad 1998, according to Esteves 2004,
47).
5.2 CSFs for ERP adoption
ERP adoption is a process of great complexity, with many conditions and factors
potentially affecting on the process. If these conditions are absent, they can
generate some problems during adopting the new system. Therefore, it has been
an increasing demand for research into the ERP success area, motivated by the
high failure rate noticed on ERP adoption. (Somers, Nelson & Ragowsky 2000,
according to Nah & Lau 2003, 6.)
Several authors have been studying the adoption process and its CSFs with the
aim to enhance ERP adoption worldwide: Holland and Light (1999, 31), Shanks
and Parr (2000, 299), Somers and Nelson (2001, 7), Nah et al. (2001, 295), etc. As
a result, there have been many CSFs found in research studies. They represent
different aspects of ERP adoption: people, technical issue, culture, management,
communication, hardware and software. The common point is that many CSFs are
interrelated; thus, missing out one factor can affect on others and the whole
project. (Nah & Lau 2003, 9; Finney & Corbet 2007, 329.)
24
One of the most extensive studies is the model of Holland and Light (1999, 31).
They conducted some case studies implementing ERP systems across a range of
industries. Holland and Light proposed a CSF research framework where CSFs
were grouped into strategic and tactical factors. Figure 8 presents their findings.
Note: BPC = Business Process Change
FIGURE 8. A critical success factors model with strategic and tactical factors
(Holland & Light 1999, 31).
Using the responses from 86 organizations implementing ERP, Somers and

Nelson (2001) described the importance of critical success factors across ERP life
cycle. They summed up a list of 22 CSFs for ERP adoption. Five most important
CSFs were: top management support, project team competence, interdepartmental
cooperation, clear goals and objectives and project management. (Somers &
Nelson 2001, 7.)
Finney and Corbett (2007) reviewed 70 articles and 45 articles were considered to
contain success factors. Totally, 26 CSFs categories were found. Table 3 below
summarizes their results. (Finney & Corbet 2007, 340.)
25
TABLE 3. Frequency analysis of CSFs in literature (Finney & Corbet 2007, 340).
Number of instances
Critical success factor
cited in literature
Top management commitment and support 25
Change management 25
BPR and software configuration 23
Training and job redesign 23
Project team: the best and brightest 21
Implementation strategy and timeframe 17
Consultant selection and relationship 16
Visioning and planning 15
Balanced team 12
Project champion 10
Communication plan 10
IT infrastructure 8
Managing cultural change 7
Post-implementation evaluation 7
Selection of ERP 7
Team morale and motivation 6
Vanilla ERP 6
Project management 6
Troubleshooting/crises management 6
Legacy system consideration 5
Data conversion and integrity 5
System testing 5
Client consultation 4
Project cost planning and management 4
Build a business case 3
Empowered decision makers 3
Note: BPR = Business Process Reengineering
26
Through an extensive literature review, the author identified eight CSFs for
further discussion and analysis in the case study: visioning and planning, top
management support and commitment, change management, IT infrastructure,
ERP teamwork and composition, BPR and minimal customization, external
competence and partnership, and end-users: involvement, education and training.
As can be seen, some CSFs were the combination of two or more CSFs above.
Table 4 presented eight CSFs and their key authors in literature that the author
adapted from Nah et al. 2001 and developed it based on his proposal.
TABLE 4. Review on CSFs for ERP adoption (adapted from Nah et al. 2001,
288).
External competence and partnership
End-users: involvement, education

BPR and minimal customization
ERP teamwork and composition
CSFs Top management support and
Visioning and planning
Change management
IT infrastructure
commitment
and training
AUTHORS
Bingi et al. (1999) X X X X X

Somers and Nelson (1999, 7) X X X X X X X
Falkowski et al. (1998) X X X
Holland and Light (1999, 31) X X X X X X X
Nah et al. (2001, 289-293) X X X X X X
Shanks and Parr (2000, 299) X X X X X X X
Rosario 2000 X X X X
Remus (2007, 541-549) X X X X X X X
Woo (2007, 439) X X X X X
Francoise (2009, 381-387) X X X X X X
Note: BPR = Business Process Reengineering, IT = Information Technology
27
As different factors are important in different phases, it is necessary to classify the

eight CSFs identified into the ERP adoption process. Figure 9 shows the
classification of these factors into an integrated framework.
2 28
2
l
k
l
k
l USE AND
DECISION
AQUISITION IMPLEMENTATION
k MAINTENANCE
PLANNING
l
Visioning and planning k
Top mgt k
Change mgt l
IT infrastructure k
Teamwork & lcomposition
BPR & minimal customization k
External competence & partnership l
End-users k
2
2
2
2 management; End-users = End-users: involvement,
Note: Top mgt = Top management support and commitment; Change mgt = Change
education and training.
FIGURE 9. Classification of CSFs in the ERP adoption process (adapted from Markus & Tanis‟s model 2000, according to Nah et al. 2001, 290).
29292
2
l
5.3 Conceptual framework
k
The conceptual framework reveals the main objective of this study which l
examines the importance of 8 identified CSFs above to the success of the case‟s k
ERP adoption. This framework is shown in figure 10. l
k
l
k
k
Top management support and
l
commitment
k
Change management l
k
IT infrastructure l
ERP
k
ADOPTION
ERP teamwork and 2
SUCCESS
composition 2
2
BPR and minimal 2
customization
External competence and

partnership
End-users: involvement,
education and training
FIGURE 10. The conceptual framework (adapted from Thong et al. 1996,
according to Ifinedo 2008, 554).
30
5.4 Discussions on identified CSFs
5.4.1 Visioning and planning
Visioning and planning is needed throughout the ERP adoption process. It is

important to have a clear business plan and vision to steer the direction of the
project. This plan should state strategic and tangible benefits, resources, costs,
risks, and timeline. Besides, it is needed to have a clear business model describing
how the company will operate after the implementation stage (Buckout et al.
1999, Holland et al. 1999, Wee 2000, according to Nah et al. 2001, 291.)
Additionally, business plan and long-term vision should determine goals and
company‟s feasibility of the project. Furthermore, it must be defined as the
company‟s most important project and all decisions made regarding it must be
achieved consensus in advance from the whole management team (Collins 2001,
according to Remus 2007, 542). Next, objectives must be specific to the scope of
the project, the end-users need to be affected and the time line should be practical
and formulated (Francoise 2009, 383).
Overall, the following characteristics for this factor can be summarized:

- A clear business plan and vision steer the direction of the project.
- Business plan should state strategic and tangible benefits, resources,
costs, risks and timeline.
- A clear business model describes how the company will operate after
implementation.
- Business plan and vision should determine goals and company‟s
feasibility of the project.
- The ERP project is defined as the most important project.
- Objectives must be specific to the scope of the project, the end-users
need to be affected
- Timeline should be practical and formulated
31
5.4.2 Top management support and commitment
Top management support and commitment is one of the two most widely accepted
CSFs. This factor emphasizes the importance of support and commitment from
top managers and senior managers who involve in the strategic planning and are
also technically oriented. (Yusuf et al. 2004, according to Finney & Corbett 2007,
335.)
Top management support and commitment is needed throughout the ERP

adoption process because the project must receive approval and align with
strategic business goals. Top managers must commit themselves to involve in the
project for allocating the required personnel resource for implementation and
giving appropriate time to finish the job. A share vision of the company and the
role of the new system and structures should be communicated between managers
and employees. Moreover, top managers should be the persons to harmonize any
conflicts between internal and external parties. (Bingi 1999, Buckhout 1999,
Sumner 1999, Roberts & Barrar 1992, according to Nah et al. 2001, 291.)
Top management should not entrust their duties of ERP implementation to their
technological departments because it is more than a technological challenge.
Project planning, forming the project team, choosing the ERP package and the
ERP implementer, the project sponsor and supervisor are among the duties that
can only be done by top managers. (Woo 2007, 435.)
The following characteristics for this factor can be summarized:

- Highly support and approval from top management is required during
the adoption process.
- Top management should not entrust the tasks in the ERP
implementation.
- Top managers must commit to involve in the project and allocate the
required personnel resources.
- Top managers should be the persons to harmonize any conflicts
between internal and external team members.
32
- The new company‟s structure and roles should be communicated to

employees.
5.4.3 Change management
Change management is the other most widely accepted CSF. Implementing an

ERP system also means there will some changes in company. Change
management is a method or procedure to manage the transition from using old
systems to adopting new ones effectively. In ERP adoption, this factor refers the
need for a company and its employees ready for changes. Specifically, a company
should formally prepare as soon as possible a change management program to
deal with the complex organizational problems of employees‟ resistance,
confusion and redundancies, and errors regarding to the new system. Top
managers can inform employees about the new project in early stages or build
user acceptance through education about the benefits and need for an ERP system
in order to get positive attitudes towards it. Change program should cover end-
users involvement and training in the implementation stage and they must be
regularly supported from top management or implementation team. The project
planning must be looked upon as a change management initiative not an IT
initiative. (Aladwani 2001, 269; Remus 2007, 541; Nah et al. 2001, Abdinnour-
Helm et al. 2003, Ross & Vitale 2000, Kumar et al. 2002, Wood & Caldas 2001,
according to Finney & Corbet 2007, 336; Francoise 2009, 382.)
Moreover, managing cultural change is considered a subcategory of change

management. It is critical to pay attention to the cultural differences and
preferences in each company and its country such as language & culture,
government regulations, management style, time zone and labor skills.
Management commitment and support is the crucial factor to ensure the necessary
conditions for effective change brought by the ERP project into the company.
(Aladwani 2001, 272; Sheu et al. 2003, according to Sheu et al. 2005, 2; Finney &
Corbet 2007, 336)
33

- A company and its employees should be ready for changes.
- A company should inform its employees about the project in advanced.
- Change program should cover end-users involvement and training in
the implementation stage and they must be regularly supported.
- The project planning must be looked upon as a change management
initiative not an IT initiative
- Change program must manage cultural changes.
5.4.4 IT infrastructure
The issue of IT infrastructure is one of the reasons for high failure rate of ERP
adoption. Therefore, it is critical to evaluate company‟s current IT readiness,
including architecture and skills, before implementation. Since ERP
implementation involves a complex transition from legacy systems and business
processes to an integrated infrastructure and common business process throughout
a company, it is necessary to upgrade or revamp the poorly current IT
infrastructure. (Huang et al. 2004, according to Woo 2007, 432; Siriginidi 2000a,
b, Somers & Nelson 2001, Tarafdar & Roy 2003, Somers & Nelson 2004, Bajwa
et al. 2004, according to Finney & Corbet 2007, 338.)

- IT infrastructure must be evaluated beforehand so that it satisfies the
requirements of the ERP system.
5.4.5 ERP teamwork and composition
This is another widely cited CSF in literature review since ERP project is a big
project in a company and it may involve all functional departments in that
company. The project team must contain a mix of internal and external staffs so
that internal staffs can develop technical skills for design, implementation and
later usage. The internal staffs should be a mix of technical, business experts and
end-users from different business units in company. Moreover, they should be
balanced and key staffs in the company. Further, the project team should be
34
empowered in decision making for continuous implementation progress. External

staffs should contain well-known ERP implementers, vendors and consultants.
(Falkowski et al. 1998, Bingi et al. 1999, Buckhout et al. 1999, Rosario 2000,
Shanks et al. 2000, Wee 2000, according to Nah & Lau 2003, 12; Finney &
Corbet 2007, 337; Woo 2007, 436.)
Besides, the project team must be dedicated to work full time on the project.
Therefore, they need to be supported, encouraged, and rewarded to maintain high
enthusiasm during implementation. Communication among various parties is also
vital and need to be managed by regular meetings or seminars. (Nah & Lau 2003,
12; Alexis Leon 2008, 542.)
Additionally, project manager appointed should be experienced, mix of business

and IT knowledge, strong leadership skills and have adequate authority to manage
all aspects of the project. Besides, the project manager must be mix of technical,
business and change management requirements. It is also important that he must
understand the company‟s business process. A competent project manager has
crucial role in ERP implementations (Nah & Lau 2003, 18; Remus 2007, 544;
Woo 2007, 436; Francoise 2009, 381.)

- The project team should be mix of internal and external staffs.
- Internal staffs should be mix of cross-functional key staffs and should
have both business and IT skills.
- The project team should be empowered to do the tasks.
- The project team should be dedicated to the project.
- The ERP team should be given compensations and incentives.
- Good communication among team members.
- The project manager should be experienced, mix of business and IT
knowledge, strong leadership skills and have adequate authority.
35
5.4.6 BPR and minimal customization
A process is “a lateral or horizontal organizational form that encapsulates the

interdependence of tasks, roles, people, departments and functions required to
provide a customer with a product or service”. A business process is “comprised
of the people who conduct it, the tools they use to assist them, the procedures they
follow and the flows of material and information between the various people,
groups and sub-activities”. Business process includes operational and
infrastructure process. Operational process refers to business functions such as
product development, order management, and customer support whereas
infrastructure process is more administrative including establishing and
implementing strategy and managing human resources or physical assets. (Earl
1994, 13; Tjaden et al. 1996, according to Pastor et al. 2002, 2; Olson 2004,
according to Yingjie 2005, 27.)
According to Hammer & Champy (1993), BPR is “the fundamental rethinking

and radical redesign of business processes to achieve dramatic improvements in
critical, contemporary measures of performance, such as cost, quality, service and
speed” (Hammer & Champy 1993, 32). The importance of BPR is to create the
best way of doing business, so it changes the way of working of a company. Kale
(2000) emphasizes “the most important outcome of BPR has been viewing
business activities as more than a collection of individual or even functional tasks;
it has engendered the process-oriented view of business” (Kale 2000, 132). To be
clear, the company‟s business strategy indicates what it wants to do, BPR
indicates how to do it and the ERP system answers the question with what. There
are several modeling techniques used in BPR process: data flow oriented methods
(dataflow diagrams, flowcharts), object oriented methods (use case diagram, state
chart diagram, and activity diagram) and control flow oriented methods (swimlane
diagrams) (Weske 2007, 347).
ERP systems provide best practices in doing business for industry domains, not
for a specific company. Therefore, many companies consider customizing the
ERP software to fit its business characteristics or even to its business processes.
36
In literature, BPR and minimal customization is the third most commonly cited
CSF. In order to obtain full benefits of ERP implementation, it is advised to
reengineer the existing business processes to best practices integrated on the
system. Firstly, the ERP system itself can not improve the company‟s
performance without reengineering the current business process. Another reason
is that modification of the software will cause some problems including software
license cost, code errors, maintenance and difficulty in upgrading to newer
versions and releases. Once the ERP system is in use, BPR should be continued
with new ideas and updates to get full benefits of the system. All in all, company
should be willing to change its business processes to fit the software in order to
minimize the degree of customization needed. (Bingi et al. 1999, Holland et al.
1999, Murray & Coffin 2001, Roberts & Barrar 1992, Shanks et al. 2000,
according to Nah & Lau 2003, 11; Finney & Corbet 2007, 338; Francoise 2009,
384.)

- Doing BPR and aligning the business processes with the ERP software.
- Doing minimal customization to the software.
5.4.7 External competence and partnership
Due to the complexity of implementing an ERP system, it is necessary for

company cooperate with the ERP consultant except the ERP implementer and the
ERP vendor. The ERP consultant or advisory firm should be involved as soon as
company realizes its needs for ERP project. The role of ERP consultants is to
consult company in defining new business process and choosing the suitable ERP
package. Therefore, the consultant should have multiple skills covering
functional, technical issues and in-depth knowledge of the software. Three
external parties above should be professional, experienced to provide know-how
knowledge and training for internal staffs. The most important thing is to ensure
external parties to involve in different stages of the ERP project. Further, it is
essential for company to manage its partnership well. Many researchers
emphasize the importance of external competence and partnership. (Guang-hui et
al. 2006, 558; Trimmer et al. 2002, Bajwa et al. 2004, Kraemmergaard & Rose
37
2002, Al-Mudimigh et al. 2001, Bingi et al. 1999, Skok & Legge 2002, Kalling
2003, Willcocks & Stykes 2000, Motwani et al. 2002, according to Finney &
Corbet 2007, 338; Francoise 2009, 387.)

- The ERP consultant should have multiple skills covering functional,
technical issues and in-depth knowledge of the software
- External partners should be experienced and professional.
- External partners should involve in different stages of the ERP project.
- Company need to manage external partnership well.
5.4.8 End-users: involvement, education and training
It is definitely essential for the success of ERP adoption. End-users should be

involved in early stage of design and implementation to improve user
requirements and understand the new system as well as give feedback from their
own point of views to enhance system quality. Since the end-users understand the
ideas of new system sooner, they will have positive attitude; their resistance to the
new system will be reduced; and training is more easily accepted. Moreover, end-
users involvement is helpful in the ERP configuration analysis and in data
conversion as well as in system testing. (Pastor et al. 2004, 131; Yingjie 2005, 37;
Finney & Corbet 2007, 342; Francoise 2009, 387.)
The aim of education and training for end-users is to help them they gradually get
used to new working habits behind the new system. In other words, they should be
educated new business processes and know how to use the system properly.
Hence, there should have an appropriate plan for training facilities and budget to
ensure effective and continuous training for existing end-users and newcomers.
Internal IT department and external staffs should play the main role in education
and training. Education and training should be a carried out seriously and end-
users are supported during training program. Further, management needs to
consider how to allocate end-users after the ERP implementation stage. (Yingjie
2005, 34, Finney & Corbet 2007, 339.)
38
According to Yingjie (2005, 35), some difficulties in users training are the
diversity of the users (IT skills, age), the complexity of the new systems
(interfaces, functions) and different available training methods (web-based virtual
training, computer-based training, and video courses).

- End-users should be involved in early stage of design and
implementation.
- End-users should be educated new business processes and know how to
use the system properly.
- There should have an appropriate plan for training facilities and budget
to ensure effective and continuous training for existing end-users and
newcomers
- Education and training should be a carried out seriously and end-users
are supported during training program.
- Management needs to consider how to allocate end-users after the ERP
implementation stage.
39
6 CASE STUDY
6.1 Company background
According to Euromonitor, a global market research company specializing in

industries, countries and consumers, Vinamilk is the leading manufacturer of
dairy products in Vietnam. In 2010, its products had 39% of market share, ranging
from core dairy products such as liquid and powdered milk, to value-added dairy
products such as condensed milk, drinking and spoon yoghurt, ice cream, and
cheese. Since commencing operation in 1976, Vinamilk have grown strongly with
compound annual growth rate of 7% and now it was producing 570,406 tons
annually with more than 4000 employees.
In 2010, Vinamilk had gross sales of 575 million US dollars, and net income of
129 million US dollar and, its market value accounts for 1.56 billion US dollar.
The company has also been designated as both a Famous Brand and one of the
Top 100 Strongest Brands in Vietnam.
6.2 ERP project description
The ERP project of Vinamilk was started from 15th of March 2005 to 1st of
January 2007 and total investment was 3.6 million US dollar including hardware
upgrade, software and other costs. The success criteria used was good system
quality, information quality and impact on individual employee, single department
that Oracle is implemented and the whole company. Figure 11 illustrates the
implementation success measurement applied to Vinamilk.
40
System quality
Information quality
ERP
Individual impact
Systems
Workgroup impact
Success
Organizational impact
FIGURE 11. ERP implementation success applied (Vinamilk 2011).
For implementing the Oracle EBS system, there were three companies cooperated
with Vinamilk: the ERP implementer – Pythis, the ERP vendor – Oracle, and the
sole advisory firm – KPMG. After considering a number of different ERP
packages, Vinamilk chose to implement the following main applications of Oracle
E-Business Suite:
Financial and accounting management

- General Ledger
- Fixed Assets
- Accounts Payable
- Accounts Receivable
- Cash Management
Manufacturing management
- Material Requirements Planning/ Master Production Scheduling
- Work In Process
- Bill of Material
- Quality Management
- Cost Management
Supply chain management
- Purchasing
- Order Management
- Inventory
Business intelligence (BI): analytic and reporting capabilities.
41
6.2.1 Decision planning phase
In the late 1990s and early 2000s, Vinamilk experienced a high growth period
(25% growth rate during 1998 - 2004.) However, Vinamilk‟s top management
recognized that the old systems were not able to deal with the rapidly increasing
production. Mr. Tran, IT manager of Vinamilk, shared in the interview:
IT modernization was an indispensable issue in long-term

business strategy of Vinamilk. Two previous systems,
manufacturing and distributing, could not ensure to provide
timely and exactly information for processes of manufacturing,
managing redundant goods in inventory and marketing.
Therefore, top management came to realize the need to
implement ERP system to solve these problems.
(Mr. Tran 2011).
Besides, the ERP adoption was desired to help to improve competitive advantage
and management once Vietnam joined WTO. Ms. Ngo, vice president of
Vinamilk, added:
In 2003, Vietnam was negotiating to join WTO. The company’s

strategy was to standardize IT systems, business processes and
restructure the company in order to improve the company’s
competitiveness. Implementing ERP would support our
employees and centralize information from business activities,
so that making decision and planning business strategy would
be carried out faster and more efficient.
(Ms. Ngo 2011).
Accordingly, on January 2004 Vinamilk required assistance of KPMG, a global

network specializing in providing Audit, Tax and Advisory services, to consult
the company in implementing the new ERP system. A feasibility analysis and
initial BPR was made. The feasibility analysis investigated the requirements of the
new system including technology, costs, personnel resource and anticipated some
impacts in work processes throughout the company. The aim of BPR was to
define new business processes that Vinamilk would comply with. An initial
expectation of benefits was also made clear. Vinamilk‟s top management hoped to
obtain benefits such as standardizing IT infrastructure, information integration,
reducing manufacturing costs, real time management, increasing efficiency and
effectiveness in operations, improving competiveness.
42
6.2.2 Acquisition phase
Through investigating current IT infrastructure, Vinamilk found that it could not

meet the requirements of the new ERP system. On March 2004, a huge
investment of 2.5 million US dollar was put on upgrading IT infrastructure.
Vinamilk selected IBM to provide solutions for data centers, host computer
system, storing system, recovering system and software of application
management.
In the middle of 2004, Vietnam was in the last negotiations to join WTO.
Vinamilk‟s managers realized that it was appropriate time to initiate the project
and in addition, the preparations were ready.
In first step, the company formed an acquisition team and named it “VIERP2004”.
Ms. Ngo was put in charge of the project effort. Other members consisted of
managers of different departments in the company: IT, finance, accounting,
logistics, manufacturing, sales and research & development and the
representatives of KPMG. The task was to investigate, evaluate and choose the
ERP package that most suitable with company‟s IT infrastructure and needs. An
ERP implementer was selected based on experience in implementing ERP
systems, its partners, and its quantitative, qualitative resources.
A short list of ERP implementers were chosen, contacted, and asked to prepare a
demo for the “VIERP2004” team. In final results, the acquisition team chose to
implement 4 application modules of Oracle E Business Suite 11i with the support
of Pythis – the ERP implementer (implementing tasks, consulting, training, etc),
Oracle – the ERP vendor (technical issues.) On 15th of March 2005, an official
contract for implementing the Oracle EBS system was signed by Vinamilk and
Pythis.
43
6.2.3 Implementation phase
Staffing project team

During implementation period, Vinamilk formed two primary teams. First, the
steering committee was headed by Ms Ngo Thi Thu Trang and included managers
of all departments in the company as well as the representatives of KPMG.
Second, a 100-person project team consisted of members from IT department and
several of each business unit‟s key employees. In that team, there were twenty
operators focusing on inputting information. The project members were removed
from their daily duties and worked on the project full time. They were divided into
4 sub-teams for different tasks in condition that each sub-team had cross-
functional members. External resource included 20 persons from Pythis, 5 persons
from KPMG, 8 persons from Oracle. Ms Ngo Thi Thu Trang was continuously
the project supervisor. Mr. Tran Nguyen Son was appointed for the project
manager position. He had more than ten years working for Vinamilk and
experienced in implementing several IS and ERP projects (co-operating contracts
with other companies.) Overall, the project team consisted of 150 persons.
Implementation plan
The project was officially initiated on 15th of March 2005. A clear project plan
was developed based on clear project goals, scope, timeline, budget and
personnel. It was planned to take 22 months to implement the system completely.
Initial investment excluding IT infrastructure upgrade was nearly one million US
dollar. All risk factors and contingency plan were also defined. The plan also
stated incentive policies for the project team. There were four modules to be
implemented: financial and accounting management, manufacturing management,
supply chain management and BI. The scope was to implement the system in
thirteen different locations: the headquarters of Vinamilk, inventories and its
factories throughout the country. Table 5 below summarizes the implementation
plan for the Oracle EBS system.
44
TABLE 5. Plan for implementing the Oracle EBS system of Vinamilk (Vinamilk
2011).
FACTOR PLAN
Modules to be implemented 4
Total investment ($) $1M
Implementation duration 21 months
Project members 150
Scope of implementation 13 locations
Implementation approach
In order to implement the Oracle EBS, the phased approach was used. As Mr.
Tran explained:
It was too difficult to implement the Oracle system in thirteen

different locations at once. Some factories were located in Ha
Noi and other provinces while the headquarters of the company
was in Ho Chi Minh City. In addition, we could go back to use
the old systems in case the new system would not function well.
(Mr. Tran 2011)
In the beginning, the sub-module of supply chain management was implemented

for logistic department. Manufacturing management, financial and accounting
management and BI were then implemented.
BPR and customization

Since Vinamilk planned to reengineer of its business processes extensively, „as-is‟
analysis was not necessary to be done. Instead, there was little change in software
code to ensure the system satisfy the Vietnamese financial and reporting
regulations. Project team tried to align business processes most suitably to the
system. By using business process modeling techniques, new business processes
were illustrated by Unified Modeling Laguage (UML) diagrams. Figure 12 below
illustrates an example of collecting money process (through banks, cash) in sub
module accounts receivable in the module finance and accounting management.
45
FIGURE 12. Collecting money process in the accounts receivable module of the
Oracle EBS system (Vinamilk 2011).
Creating master data and report format

Master data was the key business information. In the case of Vinamilk, it
included customers, suppliers, distributors, products, employees, username,
responsibility and approve hierarchy (contractual approval). Besides, Pythis had to
create over 300 new reporting formats for accounting, financial, inventory,
ordering, purchasing, etc. All reporting formats must be complied with all
regulations of the Ministry of Finance, the Socialist Republic of Vietnam
Set up application, configuration and integration

Each sub module was set up and configured for suitable working environments of
end-users. The interfaces of input were kept in English but outputting interfaces
were changed into Vietnamese. Then, all modules were integrated. The job firstly
faced a lot of troubles in linking some modules.
Testing
After fixing problems in integrating modules, trial runs were carried out based on
several test scripts or test cases. Later, new systems were run in parallel with old
ones to compare their outputs. Integration test was also performed to ensure all
46
modules function well. The test phase had strongly support from Oracle technical
staffs.
Go live
On 1st of January 2007, Vinamilk claimed that the Oracle EBS system went „live‟
and functioned smoothly. Table 6 below summarizes the actual results after
implementing the Oracle EBS system successfully.
TABLE 6. Actual results after successful implementation (Vinamilk 2011).
FACTOR RESULTS
Modules to be implemented 4
Total investment ($) $ 1.1 M
Implementation duration 21.5 months
Project members 150
Scope of implementation 13 locations
Status Completion
Education & training

Before the implementation date, all employees had been informed about the event
so that they would not be astonished. Top management also prepared the budget
for substantial training. 22-month implementation schedule contained 7 weeks of
main training. All employees (even IT staff) based on their departments were
alternatively trained to use new system and educated new processes. IT
department had responsibility of supporting users. Mr. Tran emphasized the
importance of training:
Education and training were important issues in implementing

new system. Local managers were not allowed to pull employees
from training despite of what business problem arose. The users
must master all manipulations relating to their job.
(Mr. Tran 2011)

47
Data conversion
This was important task required for the migration from old systems to the Oracle
EBS system. Twenty operators were appointed to input the data based on master
data created already. Their jobs were rechecked to ensure high quality data.
Implementation challenges
Ms. Ngo, project supervisor, indicated some obstacles in implementing the
system: “During implementing process, the company faced many obstacles. One
of the main ones related to acquire new knowledge and to adapt with new
processes.”
Mr. Nguyen, manager of Pythis, also shared some experience obtaining from this
project:
The main challenges came from implementing the system at

thirteen different locations which were far from each others, and
the software interface was in English. It required a lot of
training so that employees could manipulate their tasks easily.
(Mr. Nguyen 2011).
6.2.4 Use and maintenance phase
From Vinamilk‟s documentation, the Oracle EBS system was fully functioned on
1st of January 2007. The system has been maintained regularly in three months.
User training continued to be done.
After five months in using new systems, benefits were realized. Some main
benefits below were summarized from interviews and Vinamilk‟s documentation:
- Improving productivity of manufacturing, sales, finance, purchasing,

accounting and ordering by 20%.
- Reducing work in process by 40%.
- Operational reports were processed much faster. After implementing
the Oracle EBS system, monthly statement preparation was reduced
from 30 days to 3 days.
48
- Real-time management and data accuracy were realized

- Improving gross margin by 10% of total sales
- IT staffs obtained a lot of knowledge and experience.
- In accounting, the system helped to minimize risks. With obvious
decentralization, operations in accounting and finance were more
smoothly than previous.
- IT infrastructure was synchronized, standardized and strengthened.
6.3 CSFs analysis
Based on interviews, project‟s documentations and literature review, the proposed

CSFs are going to be analyzed to check how they were managed and how they
influenced on the adoption of the Oracle EBS system. For each factor analysis,
there is a table to present summarized characteristics according to the required
data in theories.
6.3.1 Visioning and planning
Overall, top managers and Pythis president emphasized the importance of

visioning and planning while most of employees were unsure about its influence
on the success of the project. They knew that there was a plan to implement the
system but, they could not had chance to see how clear and detailed it was.
TABLE 7. Factor 1– Visioning and planning.
Visioning and planning Evaluated

A clear business plan and vision steer the direction of the project +/+
Business plan should state strategic and tangible benefits,
+/+
resources, costs, risks and timeline
A clear business model describing how the company will operate
+/+
after implementation
Business plan and vision should determine goals and company‟s
-/+
feasibility of the project
49
ERP is defined as the most important project -/+

Objectives must be specific to the scope of the project, the end-
-/+
users need to be affected
Time line should be practical and formulated +/+
+/+ = Mentioned as a factor
-/+ = Not mentioned as a factor, but considered important
According to Mr. Tran (2011), visioning and planning were really important for
any project, not only for IT project specifically. This factor contains a set of
prerequisite activities that would influence to other activities in later stages.
Specifically, Vinamilk‟s top managers had clear determination of the scope for the
implementation, its corresponding budget and personnel resources and, time of
readiness for implementation. With clear scope for the implementation, the ERP
package was selected suitably. As ERP project was initiated, we had clear plan
with all specified goals and objectives of project, costs and budget, timeline and
specified resources, and contingency plan for managing risks factors. The planned
budget also covered training for both current employees and new employees.
Since a project was envisioned and planned carefully, risks were lessened and
thus, increasing the ability of success.
After decision for adopting the ERP system had been made, a business plan was
created to outline some strategic benefits, resources, costs, risks, timeline and new
processes that Vinamilk should operate behind the ERP implementation. This plan
steered the direction of the project and thus, it was important to the success of our
project. (Ms. Ngo 2011.)
Additionally, visioning and planning were practical and detailed to ensure that all
the tasks were under controls. In most of failed ERP projects previously, there
were some cases where timeline for project completion was set so optimistic, or
even unrealistic and leading to extend implementing period. This meant more
jobs, more costs and less enthusiasm. Visioning and planning also referred to
expectations of top managers on the system. The higher they expected on the
system, the more risky the project had. Vinamilk was not in those cases and it
contributed to the success of the project. (Mr. Nguyen 2011.)
50
6.3.2 Top management support and commitment
TABLE 8. Factor 2 – Top management support and commitment.
Top management support and commitment Evaluated

Top management should not entrust the tasks in the ERP
+/+
implementation.
Highly support and approval from top management is required
+/+
during the adoption process.
Top managers must commit to involve in the project and allocate
+/+
the required personnel resource
Top managers should be the persons to harmonize any conflicts
+/+
between internal and external team members
New company‟s structure and roles should be communicated to
-/+
employees
All respondents did agree that top management support and commitment was so
critical to the success of Vinamilk‟s project. Firstly, it was noticed that in early
steps of the implementation, a steering committee group was formed to direct the
implementation process. Ms Trang noted: “to ensure successful implementation,
in addition to spend money, you had to take care of the details”. Besides the
support of outside partners, top managers of Vinamilk created best conditions for
project team to do their jobs. The company had clear plan for personnel, costs and
incentive policies. In Vinamilk, there was a high support and approval from top
management. All changes during and after the project were informed to all
Vinamilk‟s employees.
Top management support and commitment was considered the most important
factor for the entire ERP project life cycle because only top managers could make
decisions for main issues such as planning for project, budget, time plan, the ERP
vendor and consultant selection and personnel resources. Vinamilk‟s top
managers usually paid special attention to the project and gave instant support to
51
any problems occurred and infused enthusiasm into all team members. Once there
was a conflict between internal and external parties, top managers played an
intermediary role to harmonize the atmosphere. Moreover, allocating personnel
resource was also a thorny issue for top managers. Normally, implementing an
ERP system required a great numbers of personnel resources and when the system
was implemented already, how they would be allocated? (Mr. Nguyen 2011.)
6.3.3 Change management
TABLE 9. Factor 3 – Change management.
Change management Evaluated

Company and its employees should be ready to changes. +/+
Company should inform its employees about the project in
+/+
advanced.
Change program should cover end-users involvement and training
+/+
in the implementation stage and they must be regularly supported.
The project planning must be looked upon as a change
-/+
management initiative not an IT initiative.
Change program must manage cultural changes. +/+
ERP implementation also meant that there would be surely a significant impact on
the whole company, from processes, procedures to all employees and
departments. Hence, Vinamilk tried to execute different strategies for all
employees to get familiar to oncoming changes. Firstly, Vinamilk informed all the
employees that the company was going to implement the system. Later, seminars
were held for them to get to know about the new system, its benefits to the
company and to themselves and how their normal habits in doing their jobs would
be changed. This preparation not only prevented employees‟ resistance to the
system, but also developed strong feelings toward accepting and adopting it.
Secondly, the employees were put into hands-on training where they had a chance
to get real experience about the quality attributes of the system and its potential
52
benefits. Lastly, there were two advantages for end- users to participate in the
implementation process. On one side, they understood the system sooner; the
training was therefore more easily accepted. On the other side, they feel that they
had important role in the project and this ensure their valuable commitment. As a
result, most of the employees and the departments had been doing their good jobs
in new system. (Ms. Ngo, 2011.)
Change management also referred to manage cultural issues. ERP systems were
designed by western countries and it worked based on their culture – a
professional style. The challenges for most of Vietnamese companies were weak
management, so detailed processes and traditional working habits. ERP systems
required close and accurate process, and this usually troubles the employees.
Through seminars and training, Vinamilk gradually helped the employees adapt
and master the new system. (Mr. Nguyen, 2011.)
6.3.4 IT infrastructure
TABLE 10. Factor 4 – IT infrastructure.
IT infrastructure Evaluated
IT infrastructure must be evaluated beforehand so that it satisfies
+/+
the requirements of the ERP system.
IT infrastructure modernization was considered important factor for the project‟s

success by all respondents. Once the system was implemented, all information
would be integrated. Therefore, hardware system must ensure for storing such
huge data and its processes. Besides, internet networks should be stable, fast and
high secure. Due to those requirements were satisfied, it would be much
advantageous to the implementation stage and use and maintenance stage.
Specifically, there had been no breakdowns occurred and implementation time
was reduced. The remaining issue was to train people to learn how to operate it
smoothly. Vinamilk equipped main data center and another one for backup. Each
possessed the current latest IBM server – IBM System p, p meant high
53
performance – and storage system IBM DS8100 having capacity 10 terabytes,

weight of 1 ton. (Mr. Tran, 2011.)
A synchronized and standardized IT infrastructure was so important before

initiating the project. This could be compared with building a new house where IT
infrastructure was the base and the remaining tasks were to install and to
configure the software to best fit that base. (Mr. Nguyen, 2011.)
6.3.5 ERP teamwork and composition
TABLE 11. Factor 5 – ERP teamwork and composition.
ERP teamwork and composition Evaluated

The project team should be mix of internal and external staffs. +/+
Internal staffs should be mix of cross-functional key employees
+/+
and should have both business and IT skills.
The project team should be empowered to do their tasks. -/+
The project team should be dedicated to the project. +/+
The ERP team should be given compensations and incentives. +/+
Good communication among team members. +/+
The project manager should be experienced, mix of business and
IT knowledge, strong leadership skills and have adequate -/+
authority.
Another widely agreed factor that impacted on the success of the implementation
is ERP teamwork and composition. In addition to IT infrastructure, the issue of
personnel resource preparation had been initiated soon. Those employees
potentially chosen for the project would be handed over their tasks to juniors or
coworkers to ensure normal operations during the implementation period and
team members could work full time on the project. Incentive policies were also
54
given to project team to encourage them working more positively on the project.
(Ms. Ngo 2011.)
Internal team members were staffed from key employees of cross-functional

departments, so they could share information to other departments and prevent
any conflicts during implementation. This communication was important because
all four modules implemented were integrated closely. If there was a little change
in one module, it would affect the others. Besides, these key players would be
crucial factors in user training, and controlling new system in future. Overall, all
respondents mentioned that team members were a mix of experienced business
and technical staffs, could flexible for changes.
Project team also contained external staffs – Pythis, Oracle and KPMG. Their
roles were no doubt important to provide training, knowledge to internal staffs, so
that they could master the new system after finishing the project.
Project manager was the most important member in project team. Mr. Tran had
experienced in participating in different IS projects in Vinamilk and cooperating
projects. In addition, he had worked for Vinamik for many years, so he was so
familiar with the company‟s processes.
According to Mr. Nguyen (2011), Vinamilk assigned a balanced and specialized

project team member. IT staffs were hard-working, professional and positive
working attitude. In many case companies, their managers thought that the duties
of implementation by default belonged to ERP implementers. They simply bought
the software and hired implementers and later, they would have new system in a
next few months. As a result, those projects could not be carried out.
55
6.3.6 BPR and minimal customization
TABLE 12. Factor 6 – BPR and minimal customization.
BPR and minimal customization Evaluated

Doing BPR and aligning the business processes with the ERP
+/+
software.
Doing minimal customization to the software. +/+
Another factor got common opinions from interviews was BPR and minimal
customization. Firstly, the importance of BPR was to define new business
processes for Vinamilk in the early decision planning phase and from that point,
the Oracle EBS system was selected as the best fit with the requirements. Then,
by using business process modeling tools BPR helped to diagrammatize the new
process and most of respondents said that BPR was the most difficult task in the
implementation stage.
As mentioned earlier, there was minimal change in the software. This minimal
change had some advantages. Foremost, new business processes were satisfied.
Second, it was easier for the implementing tasks and maintenance because all
modules were integrated closely, so a change in one could require changes in the
others. This was not to mention that Vinamilk must pay huge costs for license and
maintenance in case of changing the codes. Therefore, the implementation
duration and budget would be ensured. Third, this minimal change would
facilitate updating subsequent versions of the Oracle EBS system. Next, minimal
change would enhance the ERP interface quality; specifically English was
translated into Vietnamese. This led to better users‟ satisfaction and data quality.
Ultimately, integrated processes in the Oracle EBS could give Vinamilk a chance
to standardize the company‟s processes.
56
6.3.7 External competence and partnership
TABLE 13. Factor 7 – External competence and partnership.
External competence and partnership Evaluated

The ERP consultant should have multiple skills covering
-/+
functional, technical issues and in-depth knowledge of the software.
External partners should be experienced and professional. +/+
External partners should involve in different stages of the project. +/+
Company need to manage external partnership well. -/+
According to Ms. Ngo (2011), the project was supported dedicatedly by sole
advisory firm – KPMG, the ERP implementer – Pythis and the ERP vendor –
Oracle. Firstly, KPMG (www.kpmg.com) is a multinational network specializing
in providing Audit, Tax and Advisory services. The role of KPMG was to give
advice in initial preparations before implementing ERP system such as defining
new business processes; choosing suitable ERP package and ERP implementer;
documenting contractual agreements. Those supports helped Vinamilk to save
time and initial costs. Besides, KPMG supported to create report format for new
processes and played an intermediary role in interdepartmental decisions. Overall,
the role of KPMG was to simplify and clarify the ERP implementation procedures
for those companies where the system would be implemented in the first time.
Next, Pythis (http://pythis.com/webpythis/) was the current leader in

implementing software solutions in Vietnam. Moreover, Pythis was the best
partner of Oracle in Vietnam. Why these two factors were important? Pythis‟s
experience in implementing various software solutions including the ERP would
help Vinamilk avoid some mistakes of Pythis‟s previous customers and get higher
quality service. In addition, its personnel resource was abundant to undertake all
the tasks. As the best partner of Oracle in Vietnam at that time, Pythis were
handed over substantial technology, knowledge and authority from Oracle‟s
products. In Vinamilk‟s project, the important contributions of Pythis were to
57
match the system and new business processes; creating 300 report formats;
provide knowledge for internal IT staff and user training. Especially, the tasks for
analyzing business processes and procedures of Vinamilk required an experienced
and professional consultant. Additionally, the project had supported considerably
by Oracle Vietnam. Product support and troubleshooting were the main
contributions.
6.3.8 End-users: involvement, education and training
TABLE 14. Factor 8 – End-users: involvement, education and training.
End-users: involvement, education and training Evaluated

End-users should be involved in early stage of design and
+/+
implementation.
End-users should be educated new business processes and know
+/+
how to use the system properly.
There should have an appropriate plan for training facilities and
budget to ensure effective and continuous training for existing end- -/+
users and newcomers.
Education and training should be a carried out seriously and end-
+/+
users are supported during training program.
Management needs to consider how to allocate end-users after the
-/-
ERP implementation stage.
-/- = Not mentioned as a factor
All respondents strongly agreed that this factor had substantial impact on the
success of project. It is simply that if the company wants to obtain benefits from
the system, there must be someone to use and control it in a right way.
First of all, all respondents said that end-users were involved in the early stages of
implementation to define user requirements and new processes. By participating
in the project, they understood the system better, contributed to enhance system
58
and therefore, they would be more satisfied and accepted with the system.
Besides, their participations helped to shorten the implementation time. However,
junior respondents also complained that they had more jobs to do and worked
extra time.
Next, end-users must be educated new business processes so that they would get
rid of their traditional habits when doing their tasks in new system. For example,
even though a transaction was processed at the end of working day, it should be
input and updated in the system instantly. However, they traditionally thought that
it was possible to input this information in the next working day. The aim of
education was to ensure data quality because once input data was incorrect, this
led to a series of incorrect reports and transactions.
Another important issue was to train end-users. Most of respondents said that
training was indispensable not only in the implementation stage but also in later
stages. Training in the implementation stage aimed to ensure all employees know
how to use the new system, especially for some employees even had no IT skills
such as over forty-year-old employees. Training would be important to later
stages to solve the problems of losing employees or hiring new ones. Therefore,
planned budget also covered this issue. To conclude, training was always needed
to maintain skill labors and continuous running of the system.
6.4 Statistical results
The small-scale survey attached in appendix 3 resulted in the most critical factors
for the successful ERP implementation of Vinamilk. If one factor was marked
extremely important, its instance was counted as 1. Table 15 provides the result of
the survey. As can be seen, top management support and commitment, change
management, external competence and partnership, and ERP teamwork and
composition were the most important factors for the success of Vinamilk‟s ERP
project. Whereas, visioning and planning, BPR and minimal customization, end-
users: involvement, education and training, and IT infrastructure were less
important. Remarkably, there was no factor marked as neutral. It consolidated the
importance of identified CSFs to the success of the project.
59
TABLE 15. Frequency of CSFs in the Vinamilk‟s ERP project.
Rank CSFs category Number of

instances cited
1 Top management support and commitment 16
2 Change management 14
3 External competence and partnership 10
4 ERP teamwork and composition 9
5 Visioning and planning 7
6 BPR and minimal customization 6
7 End-users: involvement, education and training 4
8 IT infrastructure 1
60
7 SUMMARY AND RECOMMENDATIONS
7.1 Summary
As introduced in early chapters, companies can obtain numerous benefits from

successful ERP adoption. Conversely, the project can be a disaster for those
companies that fail to manage the adoption process. Wishing to improve the rate
of the ERP adoption in Vietnam, this thesis aims to answer the question of what
are the critical success factors for the ERP adoption of Vinamilk.
In seeking for the answers, an extensive literature review was conducted to

identify the CSFs model. Indispensably, the empirical data is collected from
various interviewees‟ perspectives, project‟s documentations and small-scale
survey in the company. The findings were derived from the analysis between
CSFs model and the empirical data.
As a result, all identified CSFs were found to be critical to the success of the ERP
adoption of Vinamilk. Specifically, top management support and commitment,
change management, external competence and partnership, and ERP teamwork
and composition were the most critical factors for its success whereas visioning
and planning, BPR and minimal customization, end-users: involvement, education
and training, and IT infrastructure were less critical.
In addition, the study found that maintaining initial scope of the project was
important to the success of the project. In particular, there was no change in the
initial choice of thirteen locations to be implemented and the phased approach
which was used to implement the Oracle EBS system.
61
7.2 Discussion and recommendations
In this section, the author revises the research methodology that he used and give
his recommendations based on research findings.
7.2.1 Discussion of the method
It is helpful to reflect on the research methodology used. The interviews were

conducted with different participants in the project: project manager, project
supervisor, representative of the ERP implementer and some representatives of the
accounting, manufacturing and logistics departments. Those people were well-
involved in the project, so they could answer all questions thoroughly. In
addition, a small-scale survey was used as a supplementary tool for research
findings. Therefore, the author believes that he made a good choice to find reliable
results.
In the deductive way of this thesis, one case study seems to be the most effective
choice because the empirical data could be obtained more sufficiently, then the
analysis would be done more deeply. The author also had a chance to get a deeper
understanding of the problem that he wanted to investigate. Moreover, the
interviews included the representative of the ERP implementer who had been
experienced in ERP adoption in Vietnam, so other case studies were also
reflected. Hence, it was not necessary to use multiple cases.
7.2.2 Recommendations
Careful preparations for ERP project is never redundant

Once the need for the ERP system is realized, a firm needs to be ready before
implementing it. The preparation must ensure suitable IT infrastructure, affordable
personnel resource and budget for the project. Moreover, it is necessary to
investigate experience in ERP adoption from other companies to minimize risks
during the adoption process. Some Vietnamese companies failed their ERP
projects due to lack of good preparations and practical investigations.
62
The need of sole advisory firms

In Vietnam, the participation of sole advisory firms like KPMG in ERP projects
has been very limited. Most companies are afraid that such participations will
increase budget for the project. Moreover, the role of such firms is rather vague
and unreliable. However, as analyzed previously, the benefits which came from a
sole professional consultant are substantial in early stages of ERP projects.
Therefore, the presence of a sole professional advisory firm would be necessary
for those companies where the ERP system is firstly implemented.
Choosing an ERP implementer carefully

This is really important in ERP adoption. The ERP implementer must be
experienced and professional in implementing ERP systems. They must also be a
trusted partner of the ERP vendors. Personnel resources of the ERP implementer
must ensure all the tasks in the ERP implementation stage. Lack of experience and
personnel resources are two reasons leading to implementation failure in Vietnam.
Ensuring internal support and commitment

ERP projects must be supervised and steered directly by top managers to
departmental managers. If there is a conflict or divergence between internal and
external staffs, this is a time for harmonization and decisiveness of those
managers. Top managers must also commit to take part in the project to encourage
and support all the project members. In lots of failed ERP implementations
previously, some top managers even misunderstood the meaning of the ERP
terminology, they simply thought that ERP was just pure software and entrusted
the tasks of ERP implementation to IT managers or even IT staffs. If there were
any problems relating to business processes or such, those positions could not
make decisions and everything must be submitted and waited for approval.
Therefore, this not only extended the duration of the process but also made the
project team more tired and unenthusiastic.
63
Ensuring effective change management

It is sure that the presence of the new ERP system will affect many aspects in a
company from business processes, procedures to staffs‟ roles. Therefore,
companies need to have a flexible strategy to create the best conditions for all the
members to adapt to the new system gradually. For example, companies may
firstly identify and evaluate the attitudes of end-users to define the sources of their
resistance to the new system. The company may help end-users get familiar to the
new system through different strategies of communication such as informing of
the presence of the new system and its benefits or giving a general description of
how the system will work. Besides, careful timing of the introduction of the new
system is also helpful. Education, hands-on training and top management
commitment are part of effective change management. Without effective change
management, ERP adoption may easily lead to failure.
Staffing an effective project team

In addition to the presence of the external staffs, the project team must be a mix of
internal key staffs of different departments in the company to ensure both business
and IT skills and enhance communication issues during the implementation
process. Those key staffs are the persons who influence directly on the adaptation
of end-users to the new system through education, hands-on training and support.
The project team also needs to be empowered to not slow down the progress.
Moreover, the team needs to be focused on implementing tasks and handing over
their daily ones to others. In many cases, underestimating the demands and roles
of internal staffs is one of the reasons leading to ERP project failure because they
themselves will be the receivers and operators of the new system.
Doing BPR and ensure minimal customization

Improving business process is the basic reason for adopting the ERP system.
Consequently, old business processes will be surely changed, the only difference
is whether the change is extensive or minimal. Therefore, BPR must be done to
define new business processes and align them to the ERP system. BPR is
important in the early phase from decision planning to implementation. In case
that company is not satisfied with the new system or new business processes, BPR
will be carried out again.
64
Another issue associated with BPR is software customization. Since no ERP

software is likely to meet all needs of a company, there exists a thorny issue:
should business processes or the ERP software be changed? It can be stated that
there is no generally optimal solution because it depends on the suitability of the
company‟s characteristics and the ERP software. In case of large Vietnamese
companies, they are in accordance with modern ERP systems. Vinamilk is a
sample where extensive business processes and minimal software customization
are carried out. On the contrary, the simple and easy-to-customize ERP software
is more suitable for small and medium-sized Vietnamese companies. Whatever
model a company belongs to, minimal customization must be ensured because if
software is modified there will be costs of software license, system upgrade,
maintenance and support. It is not to mention whether the modified software
functions well or not. It is advised to choose the ERP package that is most suitable
for the company‟s needs and conditions so that minimal customization is ensured.
In reality, many Vietnamese companies usually care about reputation of the ERP
vendors rather than specifications of the software. As a result, over-customization
is requested and the ERP project cannot be progressed because of increasing costs
and complex issues in customization.
Ensuring involvement, education and training of end-users

Before implementing the ERP project, end-users should be involved in defining
user requirements. Early acknowledgment of the new system will increase
positive attitudes towards accepting it and create a chance to enhance the system
quality. Education and training for end-users must be carried out seriously for
them to learn new business processes and software interfaces which impact on the
operations of the company. After implementing the system, training is also needed
to ensure continuous operations of the company. Simulation and scenario are two
useful methods in training staffs. In case of numerous end-users, the company can
train key staffs first; then they will train the others in the company.
65
Defining clear initial scope and maintaining it

Scope is the initial blueprint of an implementation plan. According to this, budget
and personnel resources are established. If extending the scope, budget and
personnel resource could not ensure completing the project. As a result, the
project may be delayed or fail.
7.3 Further research studies
This study is limited to investigating the importance of the proposed CSFs to the
ERP adoption success of the Vietnamese case. Therefore, the research findings do
not reflect truly the state of ERP adoption in Vietnam. Hence, there are still a lot
of areas for further research studies.
- First of all, large-scale quantitative surveys can be conducted to get

more general results. Or, multiple case studies representing successful
and unsuccessful ERP projects can be done to find out about CSFs for
ERP adoption in Vietnam in general.
- Next, it would be helpful to find out the common challenges of
Vietnamese companies before implementing ERP systems.
- Another interesting issue would be how identified CSFs impact on each
other in the ERP adoption process.
- Besides, it is necessary to find out how cultural issues impact on ERP
adoption in Vietnam.
- Finally, further research can discover or examine CSFs in ERP adoption
in Vietnamese SMEs. Likewise, it is possible to compare ERP adoption
in large companies with that of in SMEs.
66
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List of Interviews
Ms. Ngo. 2011. Vice president of Vinamilk – ERP project supervisor. Interview
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Interview 18 February 2011.
12
2
l
k
APENDICES l
k
APPENDIX 1: List of Vietnamese companies implemented ERP until February l
2010, brought by http://eac.vn (original source). k
l
Tên công ty Giải pháp Đơn vị k
Tổng công ty Xăng dầu Việt Nam - Petrolimex SAP FPT k
Ngân hang TMCP Quân đội Mbank Oracle FPT l
Công ty Viễn thông Toàn cầu GTEL Oracle FPT k
Nova Group Oracle FPT l
Công ty Phát Triển nhà Thủ Đức – Thủ Đức House SAP FPT k
Phạm Nguyên Oracle FPT l
Ajinomoto Việt Nam FPT k
Công ty CP Cơ điện lạnh REE SAP FPT 2
Công ty Sonadezi Châu Đức Oracle FPT 2
Công ty CP Hạt giống Đông Tây Oracle FPT 2
Công ty CP Cấp nước Đà Nẵng – Dawaco Oracle FPT 2
SATO Vietnam SAP FPT

Toàn Mỹ Oracle FPT
SACOM Oracle FPT
Tập đoàn Thép Việt SAP FPT
Unilever Việt Nam Oracle FPT
Xí nghiệp liên doanh dầu khí Vietsopetro Oracle FPT
P&G Việt Nam SAP FPT
Pepsi Việt Nam Oracle FPT
Công Ty CP Dịch Vụ Tin Học HPT Oracle FPT
Công ty CP Hợp tác Kinh tế và XNK Savimex Oracle FPT
Ngân hàng Hàng hải Hải Phòng (MSB) FPT.Success FPT
Ngân hàng Đầu tư và Phát triển Việt Nam FPT.Success FPT
Công ty CP Bánh kҽo Biên Hoà - Bibica Oracle EBS FPT
2
Công ty CP Cửa sổ nhựa Châu Âu – EuroWindow Oracle EBS FPT

Công ty CP Tài Chính và Phát Triển Doanh Nghiệp Oracle FPT
FBS (Gami Group)
DKSH Vietnam (Diethelm Keller Siber Hegner) SAP FPT
Công ty CP mía đường Lam Sơn Oracle FPT
Công ty CP Prime Group Oracle EBS FPT
Công ty CP Thương mại Tổng hợp Vincom Oracle FPT
Cty CP Xây dựng và Đầu tư Việt Nam – CAVICO Oracle FPT
VN
Công ty CP Bao bì nhựa Tân tiến – Tapack Oracle FPT
Công ty CP Thương nghiệp tổng hợp chế biến lương Oracle FPT
thực Thốt Nốt – Gentraco
Panasonic Việt Nam SAP FPT
Vinamilk SAP FPT
Công ty TNHH Mía đường Bourbon Tây Ninh Oracle FPT
Công ty CP Gạch Đồng Tâm Oracle FPT
Công ty CP Giấy Sài Gòn Oracle EBS FPT
Bộ tài chính (Dự án TABMIS) Oracle FPT
Kho bạc Nhà Nước Việt Nam Oracle FPT
Sơn Hà Oracle FPT
Vàng bạc Đá quý Phú Nhuận - PNJ Oracle FPT
Công ty CP Everpia Vietnam Oracle EBS FPT
Công ty CP Xây dựng và Đầu tư Việt Nam- Cavico Oracle EBS FPT
Công ty Nhựa Đông Á Oracle EBS FPT
Công ty bóng đèn Điện Quang Oracle FPT
Công ty CP Sản xuất hàng thể thao (Maxport JSC) Oracle FPT
Công ty TNHH Minh Hiếu, Hưng Yên Oracle FPT
Cảng Hải Phòng FPT.Success FPT
Công ty Supe Phốt phát và Hoá chất Lâm Thao Oracle FPT
Công Ty TNHH Du Lӏch & Thương Mại Á Đông Oracle FPT
(Vidotour Indochina Travel)
Lộc Hóa dầu Bình Sơn Oracle PVTech
Công ty CP chứng khoán Gia Phát – GPSC Oracle SSG
3
Công ty CP chứng khoán Sài Gòn – Hà Nội – SHS Oracle SSG

Công ty CP chứng khoán Âu Việt – AVSC Oracle SSG
Công ty sổ số Bình Dương Oracle EBS SSG
Công ty may 10 Oracle EBS SSG
Tổng công ty Hàng không Việt Nam Oracle EBS SSG
Công ty Toyota Viêt nam Oracle EBS SSG
Công ty bảo hiểm Bảo Minh SAP SSG
Trung tâm giao dịch chứng khoán Hà Nội – HASTC Oracle SSG
Công ty Vinagame Oracle SSG
Công ty ADC Oracle SSG
Công ty CP điện – điện tử – tin học Sao bắc Đẩu Oracle EBS Pythis
Công ty CP Cho thuê Tài chính II - Ngân hàng Nông Oracle Pythis
nghiệp và Phát triển Nông thôn Việt Nam (ALC II)
Xi măng Hải Vân Oracle Pythis
Xi măng Nghi Sơn Oracle Pythis
Công ty CP chứng khoán Sài Gòn SSI Oracle Pythis
Dệt may Thành Công PERP Pythis
Công ty CP Xây dựng & Kinh doanh Địa Ốc Hòa PERP Pythis
Bình
Công ty CP Đầu tư Công nghệ Giải trí Én Việt PERP Pythis
Tập đoàn Gemadept Oracle Pythis
Dược Sài Gòn Sapharco Oracle Pythis
Tập đoàn Tân Tạo SAP Pythis
Công ty CP bao bì Biên Hòa Oracle EBS Pythis
Vinamilk Oracle EBS Pythis
Công ty CP Đồ hộp Hạ Long CANFOCO Oracle Pythis
Masan Group Oracle Pythis
Café Trung Nguyên Oracle Pythis
Saigon Co-op Oracle Pythis
Công ty CP XNK Y Tế tp Hồ Chí Minh Oracle Pythis
Công ty TNHH giải pháp CNTT Lộ trình Avenue Oracle Pythis
HT Mobile Oracle Pythis
Hutchison Telecoms Oracle EBS Pythis
4
Sfone Oracle Pythis

Zamil Steel Vietnam Oracle Pythis
Tổng Công ty Khoan và dịch vụ Khoan Dầu khí Oracle Pythis
PVD
Canon Viêt Nam Oracle EBS Pythis
Công ty Chứng khoán Ngân hàng SACOMBANK Oracle Pythis
Công ty TNHH Paxar Viet Nam Oracle Pythis
Công ty Xổ Số Kiến Thiết Bình Dương Oracle Pythis
Tâp đoàn Đầu tư Công nghiệp Việt Á Oracle Pythis &
CMCSoft
Công ty Đầu tư phát triӇn sản xuất Hạ Long (BIM) Oracle EBS TVE
Công ty bia Đại Việt Oracle EBS TVE
Công ty CP Xây dựng Kiến trúc AA SAP CSC
(Global
CyberSoft)
Tân Hiệp Phát SAP CSC

Công ty CP Vận tải biển Vitranschart SAP CSC
Tâp đoàn Điện Lực Việt Nam - EVN Oracle CMC
Nguyên Bình Group Oracle HPT
Lucky Group Oracle HPT
Công ty TNHH Ôtô Thế Giới (World Auto) Incadea Tectura
5
APPENDIX 2: List of interview questions
ERP project manager – Mr. Tran
1. What were the reasons for implementing the ERP system?

2. How was the ERP project planned?
3. How was the scope defined? Did it change during the implementation
process?
4. What approach used to implement the system? Why?
5. How do you assess management commitment and support to the
outcome of the project?
- Was a highly support from top management in the project?
- How did management involve in implementation? Did they allocate
the required personnel resource?
- Was management in middle in time of conflict between internal and
external members?
6. Was the project planning looked upon as a change management
initiative or IT initiative?
7. What IT infrastructure the company had before implementation? Was
it evaluated?
8. What needed to be changed: business processes or ERP system?
9. Did you do BPR?
10. Did you change software code?
11. Did the ERP vendor and the consultant involve in different stages of
implementation? How do assess their collaboration and support?
12. Were end-users involved in design and implementation of business
processes?
13. Was IT staffs trained? Were they beneficial from external support?
14. Were end-users educated new processes and trained how to use the
new system?
15. Did the company have an appropriate plan for training facilities and
budget to ensure effective and continuous training for existing end-
users and newcomers?
16. Were end-users supported during education and trainings?
6
17. How was the communication during implementation?

18. What were the criteria for the implementation success?
19. What experiences did you obtain from the project?
ERP supervisor – Ms. Ngo
1. What were the reasons for implementing the ERP system?

2. What was the company‟s expectation from the ERP project?
3. Did the company have business plan for the ERP project? Did it
include strategic and tangible benefits, resources, costs, risks and
timeline?
4. Did the company communicate new structure and roles to all
employees?
5. How did Vinamilk prepare for changes behind the ERP
implementation?
- Did the company inform its employees about the project?
- Were end-users involved and trained in the implementation process?
- How were the trainings for IT staffs?
6. How was advisory firm selected? Did they have multiple skills
covering functional, technical issues?
7. How was ERP package and ERP implementer selected?
8. What were the roles of external partners in project?
- Did they have in-depth knowledge of software?
- Was the company able to manage external staffs well?
9. How was the project team selected?
- Did the team include cross-functional key employees? Was the team
a mix of external and internal staffs?
- How was the knowledge of team members: technical, business?
- Were team members dedicated to the project?
- How was the project team encouraged to do their jobs well?
- Was the project team empowered to do the tasks?
- How was communication among team members?
- How was the project manager selected?
10. How were responsibilities and authorizes assigned to the project team?
7
11. Did top management consider allocating end-users after the ERP
project?
12. How do you assess the current system?
13. What experience did you obtain from this project?
Pythis manager – Mr. Nguyen
1. According to you, what was the impact of visioning and planning in

the ERP project? How was about Vinamilk?
2. How do you assess management commitment and support to the
outcome of the project?
- Was a highly support from top management in the project?
- How did management involve in the implementation?
- Was management in middle in time of conflict between internal and
external members?
3. What do you think about change management in ERP implementation?
4. How was project team of Vinamilk?
5. Was the ERP software customized? How was the importance of
minimal customization in ERP project?
6. What were the main challenges during implementation?
7. What experiences did you obtain from the project?
Departments: IT, Finance & Accounting, Manufacturing and Logistics

1. What is your title in your department?
2. How were your business/ IT skills?
3. At what stage did you involve in the ERP project?
4. Were you encouraged to do your task? Did you work full-time on the
project?
5. Did you help end-users in training?
6. Were you educated new business processes?
7. What knowledge you learned from the external staffs?
8. What challenges did you face during implementation? Did you get
support from top management?
9. Did you get incentives/compensations to do your tasks?
8
10. How was the communication among team members during

implementation?
11. How do you feel about new system?
9
APPENDIX 3: Questionnaire
How do you evaluate the importance of the following factors to the ERP adoption
success of Vinamilk?
Somewhat Extremely
Factors Neutral Important
important important
Top management commitment
and support
Change management
IT infrastructure
ERP teamwork and composition
BPR and minimal
customization
External competence and
partnership
End-users: involvement,
education and training

Critical Success Factors For Erp Adoption Process

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CRITICAL SUCCESS FACTORS FOR ERP

LAHTI UNIVERSITY OF APPLIED

NGUYEN, HUU VINH: Critical Success Factors for ERP

Bachelor‟s Thesis in fulfillment of the Bachelor of Business Information

Keywords: Enterprise Resource Planning (ERP), Critical Success Factors

Foremost, I would like to express my huge gratitude to my supervisor,

5 REVIEW ON CRITICAL SUCCESS FACTORS IN ERP

7 SUMMARY AND RECOMMENDATIONS 60

FIGURE 1. Convergence of multiple sources of evidence. 10

TABLE 1. Provided details of main interviewees. 11

This research is divided into seven chapters: introduction, research approach,

2.1 Research background

Nowadays, ERP systems have been widely implemented to obtain competitive

In practice, implementing an ERP system is costly, time-consuming and complex.

Firstly, ERP implementation projects in Vietnam are developing intensively: The

Secondly, there is a need to enhance ERP adoption success in Vietnam: The

2.2 Research question and objectives

The question is answered through the following methods:

2.3 Scopes and limitations

Methodological insight gives an audience a better

(Gammelgaard 2004, 480)

3.1 Research purpose

In terms of research purpose, the threefold one of exploratory, descriptive and

A descriptive study is objected “to portray an accurate profile of persons, events

An explanatory study is used to establish causal relationships between variables

3.2 Research strategy

Along with research approach, it is important to pay attention to research strategy

3.3 Choice of method: qualitative or quantitative?

By our pragmatic view, qualitative research does imply a

(Kirk & Milner 1986, 10)

Quantitative method is often used for numerical data collection technique

In contrast, qualitative research explores attitudes, behavior and experiences

3.4 Data collection

those that rely on only single source of information”. In addition to theoretical

FIGURE 1. Convergence of multiple sources of evidence (adapted from Yin 2003,

interviewees. Therefore, telephone interviews were sometimes replaced for email

In order to set up interviews, the targeted company – Vinamilk – was contacted

TABLE 1. Provided details of main interviewees.

Interviewee Organization Position

In addition, small groups of cross-functional staffs participating in the project

TABLE 2. Sample group for interviews.

Department Number of interviewees

3.5 Data analysis

FIGURE 2. Components of qualitative data analysis – Interactive model (Miles &

flows and propositions. Figure 2 above illustrates the components of qualitative

3.6 Validity and reliability

Validity and reliability have to be considered to reduce the risk

(Chisnall 1997, 12)

4.1 ERP definition

Wallace and Kremzar (2001, 5) define an ERP system as:

An enterprise-wide set of management tools that balances

In figure 3 below, the ERP system is the central database.

FIGURE 3. Anatomy of an ERP system (Davenport 1998, 124).

4.2 Benefits of implementing an ERP system

- Operational: ERP systems are built to integrate and automate business

4.3 ERP adoption process

Decision Acquisition Implement Use &

Decision planning phase

- Formation of project team: consist of project manager, IT personnel,