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Essay: Effect of Critical Success Factors (CSFs) over the phases of Enterprise Resource Planning (ERP) executions

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  • Subject area(s): Project management essays
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  • Published: 18 April 2020*
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Introduction
The paper portrays the effect of Critical Success Factors (CSFs) over the phases of Enterprise Resource Planning (ERP) executions utilizing the reactions from associations that finished or are finishing an ERP usage. Our outcomes give counsel to management on how best to use their constrained assets to pick those CSFs that are destined to influence the execution of the ERP framework.

Project Scope
Project management is about managing tasks carefully. For a project to be safe and successful resources like financial, natural, human resources and other critical factors should be managed properly. Resource Planning in a project helps us in the effective assignment of resources onto a project, such that it increases both the resource output as well as quality of the project. It is definitely necessary for us to have a scientific system in place so that planning strategy for resources aligns with the project goals and thus helps the project get there in the most cost-effective route. Project Scope includes processes required to make sure that the project has all the work required, and only the work required, to achieve success. Features and requirements in the product or deliverable not originally planned, is not a recommended practice.
Product Scope
Product scope features and functions that characterize processes, tools and techniques required do differ by the application area defined as part of the product life cycle. Product life cycle differs depending on the type of the industry or the domain. Product scope is measured against the product requirements. A product may have several subsidiaries that must be done to deliver a product. A project generally results in a single product or deliverable.
Product Scope Description
Product scope documents the characteristics of the product or service that the project was undertaken to create. Scope must be progressively elaborated and must have enough details to support project planning
Major scope management processes include:
1. Collect Requirements
2. Define Scope
3. Create Work Breakdown Structure (WBS)
4. Control Scope
Collect Requirements
Collect Requirements process involves defining and documenting stakeholder’s needs to meet the project objectives, defining and managing customer expectations. Below are some of the tools and techniques used:
1. Interviews
2. Focus groups
3. Group creativity techniques
4. Facilitated workshops
5. Group decision making techniques
6. Prototypes
7. Observations
8. Questionnaires and survey
Define Scope
This is the process to develop a detailed description of the project and product. Defining scope improves the accuracy of cost, duration, and resource estimates and defining performance measurement and control, facilitates clear responsibility assignments.
Poor scope definition results in
1. Higher final project costs
2. Changes that disrupt the project rhythm
3. Rework
4. Increase in project time
5. Lower productivity
6. Lower morale of workforce
Create Work Breakdown Structure (WBS)
WBS is a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables. The Work breakdown Structure is finalized by establishing control accounts for the work packages and a unique identifier from a code of accounts. These identifiers provide a structure for hierarchical summation of costs, schedule, and resource information. Control accounts are placed at selected management points in the WBS.
Control Scope
Control Scope is a process to monitor the status of the project and product scope and manage changes to the scope baseline. Project management plan contains the following information that is used to control scope:
1. Scope baseline
2. Scope management plan
3. Change management plan
4. Configuration management plan
5. Requirements management plan
In variance analysis, project performance measurements are used to assess the magnitude of variation from the original scope baseline. An effective scope management plan doesn’t end when the project work starts.
Throughout the project, you must go back to the stakeholders each time the project team completes a project deliverable. The stakeholders verify that project deliverables satisfy the scope requirement in completeness and quality. For instance, if one of the requirements of the centralized account opening process is to create an effective user interface for remote offices, the stakeholders will perform quality and does the user testing to make sure that this requirement has been met.
Any changes to the base lined scope requirements affect the project. If the change is an additional requirement or modification to an existing requirement, the project may take longer or sometimes costs more to complete the deliverable. If the change is the removal of a project requirement, the impact may be positive in terms of time and money as there are chances to be able to complete the project ahead of schedule or under budget. For the scope management plan to be successful and effective, both negative and positive changes must be controlled. An change requests or feature requests must be approved by the authorized stakeholder and every detail such as project plan, impact of changes, impact on time and budget must be documented by the project manager. Finally, a designated stakeholder group must prioritize any additional requirements.
Five Key Sources of Critical Success Factors
Critical Success Factors are tailored to a firm’s or manager’s particular situation as different situations (e.g. industry, division, individual) lead to different critical success factors
1. The industry
2. Competitive strategy and industry position
3. Environmental factors
4. Temporal factors
5. Managerial position
There are some CSF’s common to all companies operating within the same industry. Different industries will have unique, industry-specific CSF’s. An industry’s set of characteristics defines its own CSF’s. Different industries will thus have different CSF’s, for example, research into the CSF’s for the Call center manufacturing, retail, business services, healthcare and education sectors showed each to be different after starting with a hypothesis of all sectors having their CSF’s as market orientation, learning orientation, entrepreneurial management style and organizational flexibility.
In reality, each organization has its own unique goals so while there may be some industry standard. A firm’s current position in the industry (where it is relative to other competitors in the industry and also the market leader), its strategy, and its resources and capabilities will define its CSF’s. The values of an organization, its target market etc. will all impact the CSF’s that are appropriate for it at a given point in time.

Project Budget and Schedule
Budget and schedule are the fundamental for any projects and budget decides the project’s success precisely. Budget describes the volume of money that needs to be spend on the project. If you have an adequate budget for your project, then probably you can hire many people to complete the project on or ahead of time and even we can deliver more than what we have in scope. In fact, allocating budget is the initial phase of project and usually the project plan will not be started until the budgeting is done. Irrespective of project duration, resource size, etc budget should be allocated first. Even though if there are any plans to put on change requests to your project, the actual core process will continue to be the same.
Very detailed estimation for all the project charges in budgeting is highly advised. For example, the estimation report should contain something like total cost for human resources, material resources, hardware cost, software cost, contract cost, etc. So, once you have this estimation report ready, then probably it should be added to budget plan. It’s a lot easier to monitor the cost if the budget plan has the estimation cost of the project. The monitoring process is about checking whether project’s cost is going as per the plan or the budget is over used in short time.
Generally, you envision the project cost and duration approximately when you plan to sign up for a project. Also, there are some rare occasions you might end-up estimating the project cost even if you don’t have any idea about the project which is generally called as ballpark estimation. Most of the project experts/researchers do follow this ballpark mechanism for handling the small project which might not needed huge budget, or they used to estimate these kinds of project way before in the past. However, going forward in the project plan this approach will be realtered based on the project needs or if there are any additional requests that could impact the plan.

The following are the some of the mechanisms and tools to estimate the cost,
1. Identify the asset cost
2. Vendor cost
3. Backup cost
4. Quality cost
Identify the Asset Cost:
All the living and non-living properties are assets of an organization. Moreover, we will need to calculate all the resource costs which includes employee’s and contractor’s pay. People work for different pay rate and some people get payed very low or some get payed very high which also needs to be calculated as part of this resource cost estimation stage. To recapitulate, we need calculate both labor cost and material cost as well.
Vendor Cost:
Occasionally company might want to hire some of the third-party contractors to get the project done. This could be anything related to implementation or support. For instance, if a company does not have any experts for managing the project security, the company may decide to outsource security part of this project to some third-party vendor. Now the company does initiate the bidding with various vendors and the company will decide to handover the project to vendor whose bid was quite low with effective plan compared to others. Therefore, vendor cost should be calculated before hands as part of budget plan.
Backup Cost:
There are some scenarios where project might be taking more than the estimated budget. So, there must be some additional budget that should be allotted to the project even though if it is not required. Without allotting these extra funds or backup costs, there are many real-life examples where the projects are dropped at the last stages as they find not extra money when needed.
Quality Cost:
Quality cost decides the project success persistently. For instance, let’s assume your project might not get funds for quality, project has been completed and customers identified some bugs in the project which is spoils the customer’s confident on your project. So, now you have to allot some resource to fix that issue which end-up paying than usual. It’s better to allot some money for quality sooner than the later which help us to identify the issues in the beginning stage itself.

There are the some of the estimation methods that experts use to estimate the project plans, those are,
1. Analogous Estimation
2. Parametric Estimation
3. Bottom-Up Estimation
4. Activity-Based Estimation
Analogous Estimation: It’s one way to estimate the project and it perhaps estimate from the alike projects, so that they would easily make it done. It takes similar estimation from another project as both are looks like same. We would definitely go with this approach when two projects are having the same resources and complication. In this approach, we can modify the anything even once the plan got approved by the panels. Moreover, Panels reveal their decision after having detail understanding of the submitted project plan which requires some years of experience.
Parametric Estimation: Usually this estimation will calculate based on core parameters which are common to other projects as well. For instance, Victor decided to rent two boats from third-party dealers for 4 hours. The dealer replied him like “rent for single boat is $30 per hour”. Victor has estimated his budget and he come to conclusion that he needs to allot $240 for his project. So here the estimation will be calculated based on the two parameters such as no of boats and how many hours. Similarly, the project plan can be changed at any level.
Bottom-Up Estimation: This is estimation which takes lots time to estimate and its very detailed estimation for each and every item in the project. Usually, some of the micro management would like to have this kind of estimation. This estimation should include all the cost for each item such as labor cost, materiel cost, contractor cost, etc. For example, Victor has decided to shop in Amazon.com. So, he has gone through amazon website to identify price of each item and came to conclusion.
Activity-Based Estimation: This is one of the rarest estimation people do nowadays. It’s just made use of all activity and estimate cost for each and every activity. The activity might be from local from the company or it could be from third-party contractors.
As explained before, scheduling and budgeting are tightly coupled. If something goes wrong with the planning and it did not go well as planned, then it’s going to affect the budget directly. For instance, let’s take the implementation phase, we have planned to finish all the implementation in two months and allotted budget for this is $10,000. However, due to some reason they took 3 months to finish the implementation, we need to pay all the utilized resources for that extra one month which is around $5000, so totally $15,000 amount has been consumed by the implementation phase whereas only $10,000 was allotted for this originally.
To recapitulate, budget and schedule are main success key factor for any project and we want to make the project successful, then need give much attention for these phases.

Project Resources
Project management is about managing tasks carefully. For the project to be successful managing resources plays a key role. When we talk about resources, it can be of many types and not just limited to like financial, natural, human and time resources, etc. Managing these resources helps us in the effective allocation of resources onto a project, maximizes both resource output as well as project quality. It is vital that we have a scientific system in place so that resource planning strategy aligns with the project goals and thus helps the project get there in the most cost-effective route, there is.
Resource management is a distinct problem because there are many things that has to be considered to ensure that the project completes on time and also adheres to both budget restrictions and quality.
Generally, when talking about resource management, we can divide it in to 2 subtypes. One being resource levelling and the other is resource allocation. Resource allocation looks for issues with project scheduling when faced is resource constraints and try to look for solutions on how to minimize the total duration whereas resource levelling exists to solve the issue to counterbalance the resource utilization during the entire project life cycle with time constraints
Also, we can categorize the resource levelling to 2 sub categories based on resource types. Single vs multiple resource levelling.
Project Resources (vs Cost):
When we can consider and take the project deadlines out of the equation, resource allocation determines the outcomes of the project like project scheduling, deadlines, budget and even the decision maker’s strategy for the resource utilization. Moreover, the SME are considered as scarce resource and they is no appropriate substitution for them. So, if we consider two extreme situations in this perspective, one being, the scare resources are available more than demand (resource underloading), then we should keep them because it will be difficult to reemploy them temporarily (example: professional technicians and the core equipment during construction phase and need to visit the cost draft for employment and their needs). During this phase decision makers has to decide whether to let go or keep the resources (considering budget). On other hand scare resource is less than its demand(resource overloading), the decision makers has to hire additional resources immediately to avoid impact on project scheduling. The resource can be of higher cost which then fluctuates the project budget.

Fig 1. The calculation for the extra hire cost and idle resource cost. Adapted from Yan, Q., Zhang, Q., & Zou, X. (2016)
Structure Allocation and Negotiating:
Structure of allocation is very important because of multiple levels that should be considered during the process. The easiest way is to break the problem in to multiple small and simple chunks and then coordinate to come up with an optimal solution. Let’s take an example of construction of a car where things like wheels, frame, transmission, steering components and other parts needs to be assembled correctly and they are not all done at the same time. People are assigned the tasks individually and coordinated regularly to complete the design for the product. Also, people in same design functional group has to be in cooperative relationship. So usually project managers compete for both similar and scare resources to reach for ideal team. This will bring the team to have healthy cooperative and competitive relationship by bringing up the work quality. Negotiating to get the right balance is an important skill for resource management to develop support for the project and preventing frustration among all parties involved, which could delay or cause project failure.
Critical Analysis of the Goal:
Analysis of the goal is very important as it’s a major factor that directly influences the resource management. Theory of constraints defines a way to clearly analyze this. Theory of constraints suggest that every process has only one constraint and the total process of the throughput is improved when that constraint is unblocked. TOC provides a methodology to identify and solve the constraints by focusing on 5 steps which is referred to as cyclical process (“Focus Improvement on the manufacturing Constraint”, 2017).

Fig 2. The five focusing steps. Adapted from GALLI, B. J. (2018).
For this model to work as expected, it is assumed that once a constraint is identified and enhanced/unblocked, the limitation is moved to a different constraint. This identifies the ways to avoid any bottlenecks/constraints in the project and how the inability of resource management adds fuel to the fire.
For reference, here is a representation of how resource management is closely aligned with every phase of project helping to complete project deliverable in given deadlines.

Fig 3. Project management, HRD, and business (PMHRDB) partnership model. Adapted from Pak, A., Carden, L. L., & Kovach, J. V. (2016)

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