The Critical Soft Factors Affecting the Successful Implementation of Enterprise Resources Planning in the Egyptian Industrial Sector

Introduction

In 1990s, Egyptian companies faced many problems and challenges, including: the rise of international competition in the Egyptian market, weak infrastructures among public organisations and some private Egyptian organisations, low quality of suppliers in most Egyptian manufacturing industries and delays in deliveries to customers in the Egyptian market. Therefore, Egyptian organisations paid more attention to the importance of using information technology (IT) to gain a competitive advantage in the market, and also, for solving the problems facing them. There are many tools and approaches of for implementing it, one of which is Enterprise resources planning (ERP).

It helps organisations to develop collaborative and/or strategic partnerships with suppliers to share common business goal in the business and remain competitive in the marketplace (Dey et al, 2010). More importantly, ERP systems have been readily adopted by a wide range of businesses (Cullinan et al, 2010). They have become an integral, essential and critical component in the overall business processes of several organizations and represent one of the largest IT investments (Jackson, 2010; Chung and Snyder, 2000).

ERP systems provide a framework for integration and standardisation of business processes. The key benefits gained by implementing an ERP system include better control over costs, improvement of both customer response times, streamlined and automated processes and visibility of data and process statuses (Aberdeen, 2009).

Accordingly, the successful implementation of ERP systems is important to the organisations as a strategic tool to improve existing operations. Improvement inevitably leads to change which must be managed (Kemp and Low, 2008).

Sawah, Tharwat and Rasmy (2008) concluded that the success of ERP implementation in Egypt is lower than the success rate in other western countries, because of Egyptian culture, which affects business environments and successful implementation.

Additionally, recent ERP systems were developed from material requirements planning systems, which were initially used to assist manufacturers with inventory management and control. Over time, ERP systems evolved and incorporated all processes found in an enterprise, such as capacity planning, productions scheduling and controls, financial control, human resources, accounting, logistics, supply chain management, and marketing. Therefore, these systems were developed to provide efficient.

The aim of this study is to examine the key soft success factors needed to ensure the success of ERP implementation in the Egyptian industrial sector.

Additionally, extensive study of the literature failed to reveal any empirical studies that dealt with the soft factors of enterprise resources planning in manufacturing companies in less developed countries, such as Egypt.

Literature Review

ERP was conceived and devised in the 1970s, but its true benefits to the business world were only realised in the early 1990s. Nah et al (2001) described ERP as a packaged business software system that enables a company to manage the efficient and effective use of resources such as (materials, human resource, and financing.) by providing a total integrated solution for an organisation’s information processing needs (Dey et al., 2010).

These systems were designed to provide seamless integration of processes across functional areas with improved workflow, standardisation of business practices, and access to real-time, up-to-date data. ERP systems are complex and implementing them can be a challenging, time consuming, and expensive project for any company (Davenport, 1998).