Essay: ERP implementation in Saudi Arabia

An exploratory study of ERP implementation in Saudi Arabia is the title of an article published by Al-Turki, U. M on 20 January 2011.  The publisher is Taylor & Francis. The article discusses the implementation of ERP in Saudi Arabia, factors that affect the successful implementation, and therefor provide a proper guidance for organizations planning to adopt ERP, as well as help finding solutions for improving performance and competitive. The methodology used for conducting this study is based on a questionnaire for targeted organizations. It emphasized issues like success rate, factors… Etc. Questionnaire then was analyzed using statistical methods.
Survey results were analyzed in terms of many aspects, which will be addressed and discussed in details.
‘ Deployment Status:
75.9% of the respondent organizations already have deployed the system, 19.3 were in the planning phase and 4.8 do not have immediate plans for ERP implementation. Those numbers show a high level of ERP implementation in Saudi Arabia, and when analyzed results showed a huge jump in IT attitude.
‘ Modules Implemented:
Most Saudi organizations are still in the first wave implementation, which contains mainly the financial module that is followed by Human Resource (HR) and Sales and Distributions(S&D) modules. However, even those organizations which are using other modules are still in the trial stage.
‘ Vendor Market Share:
ERP market in Saudi Arabia is highly dependent on foreign vendors. SAP and Oracle are leading the market, some other vendors are there but the main effect is by the vendors addressed above because they have the highest total share.
‘ Rate of Success in ERP Implementation:
It is very difficult to measure the rate of success and failure since it varies from one’s perspective. However, evaluation systems were categorized into complete success, partial success, and complete failure. Measuring success is not an easy task, but researchers are taking in consideration user’s satisfaction as a major success factor. In this study, user satisfaction was categorized based on four elements; complete success, partial success (50% & 75%), and complete failure. About 1/4 of respondents reported a complete success, less than 7% reported complete failure. Almost half of the respondents reported 75% success, whereas 1/4 reported 50% success. Results show a high percentage of success rates.
‘ Time/Cost Estimates Conformance:
Time and cost of ERP implementation is estimated based on project scope, and size of the organization. The major success factor is to complete the project within the planned budget, and on the expected time. Result of survey showed that 1/3 of organizations are suffering from major time delays, and about 1/4 of organizations suffered from budget overruns. In addition, size of the organization affects time delays and cost overruns. Results showed that large sized organizations are better than small/medium organizations in the aspect of managing time delays and cost overruns, they were able to deliver projects on time and within the budget. However, medium sized organizations are experiencing significant budget overruns.
‘ Leadership and Change Management:
Two questions targeted the HR side of implementation, one was about the leadership and the other was about change management programs. Results showed that ERP implemented by business managers is likely to success five times higher than the ones lead by IT managers or consultants. According to the second question, about 55% of organizations had change management programs, while 25% had some informal activities and 20% had none. Results were analyzed and showed that the presence of change management programs contributed to the success of ERP implementation.
‘ Critical Success Factors:
The most important success factors as the result shows are: strong management commitment and clear strategic objectives, while change management is the third. Other factors are: project management, IT skills, business process skills, training, learning, and change readiness.
Saudi Arabia is moving fast toward adopting ERP implementation. The article highlights the experiment of ERP implementation in Saudi Arabia and some of the factors related to management practice and implementation strategies, and indicates solutions. The results discussed in the article does not differ in other cultures, since the critical issue for successful ERP implementation is same.