Human risk factors in post-implementation phase of ERP in SMEs in India

As Small and Medium Scale Enterprises (SMEs) are getting more customer-focused and profit driven they are adopting tools like Enterprise Resource Planning (ERP) systems in order to automate and integrate all of a company´s business processes for the smooth functioning of the organization. Non-value adding business processes are removed and the organizational structure is streamlined with the use of ERP systems. The study reported in this paper aims to identify, assess and suggest improvements to ERP post-implementations shortcomings due to human related risk factors for a discrete manufacturing unit in India. The organizational human-related factors post implementation was analyzed by adopting in-depth interview and questionnaire responses as the main method of data collection. The findings identified that the success of ERP systems is hindered by resistance of users to technology change. The human factors found in the study were classified to be psychological, behavioral, incomplete training and human errors at the time of data entry. The study also indicates a strong need for change in the training structure provided by vendors in order to successfully implement the ERP system. In contrast with technical risks and disregarding the deficient business processes and business drawbacks, human-related risks due to change management techniques applied are more crucial to potential ERP failures and can have long term implications for the success of ERP usage in manufacturing units.