Defining Information Technology Failure
Information technology failure is one in which stakeholders are left dissatisfied with how the system has served their interests (Chua, 2009; Sauer, 1993). The Standish Group (1994) defines ERP organizational change failure (i.e. ERP failure) as one in which the project was canceled, over budget, missed time delivery, and/or did not meet stated business goals. Wong, Scarbrough, Chau, and Davison (2005) describe how failure refers to ERP system downtime, fully functional, loss of sales, lost market share or lost competitive advantage. Wong, Scarbrough, Chau, and Davison (2005) further note that often ERP failure is identified in which the project approval phase objectives and goals have not realized sufficient or expected return on investment. Performing the organizational exercise of defining failure can actually have several benefits, including fostering a culture that encourages learning, innovation, and continuous improvement. A healthy and proactive perspective on ERP failure can contribute to a positive organizational culture that values learning, innovation, and adaptability throughout the ERP implementation lifecycle. It creates an environment where employees feel empowered to take risks, share insights, collaborate, and continuously look to improve.
The Key: Ensuring Objective Measurement of ERP Failure (and Success)
Why be another unfavorable ERP statistic if you can avoid it? The key is keeping the definition and measurement of failure, or success, as objective as possible. The organization needs to spend the time and effort to formally document and agree on how failure, and success, will be defined. Without a formal process in which failure/success is formally documented and communicated, the idea of failure or success can become quite subjective and mean many things across the stakeholder groups and their members. Moreover, the organization needs to allow some time to fully realize the benefits and value of ERP assimilation. Ghosh (2018) notes that stakeholders should allow time before considering ERP as a failure as it takes months to years to realize the return and benefits of ERP. Learn more about ERP failure and challenges, “The Absence of Significant ERP Challenges Is Not a Prerequisite to Success“.
Learn more: Wong, A., Scarbrough, H., Chau, P., & Davison, R. (2005). Critical failure factors in ERP implementation.
Learn more about how Nestell & Associates’ ERP consulting services can support your ERP organizational change effort.