# A Knowledge Management System for ERP Implementation

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## A Knowledge Management System for ERP Implementation

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An enterprise resource planning (ERP) is an enterprise-wide application software package that integrates all necessary business functions into a single system with a common database. Its implementation is a complex process in terms of technology preparation and organizational change management. Although the importance of knowledge management (KM) in ERP implementation has been recognized, how to conduct knowledge management has not received deserved attention till now. The main objective of this paper is to develop a KMsystem to manage the knowledge of ERP implementation process. To accomplish this, the article first identifies the types of knowledge in ERP implementation.......

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## Nội dung Text: A Knowledge Management System for ERP Implementation

1. Systems Research and Behavioral Science Syst. Res. 23,157^168 (2006) Published online inWiley InterScience (www.interscience.wiley.com) DOI:10.1002/sres.751 & Research Paper A Knowledge Management System for ERP Implementation Yuan Li*, Xiu Wu Liao and Hong Zhen Lei School of Management, Xian Jiaotong University, Xian, China An enterprise resource planning (ERP) is an enterprise-wide application software package that integrates all necessary business functions into a single system with a common database. Its implementation is a complex process in terms of technology pre- paration and organizational change management. Although the importance of knowledge management (KM) in ERP implementation has been recognized, how to conduct knowledge management has not received deserved attention till now. The main objective of this paper is to develop a KM system to manage the knowledge of ERP implementation process. To accomplish this, the article ﬁrst identiﬁes the types of knowledge in ERP implementation. It then summarizes various KM activities based on a six-stage model. At last, it proposes a KM system that consists of cooperative working platform, consulting platform, individual KM platform, organizational KM platform, and knowledge transfer platform. This system can effectively manage knowledge and provide support for the successful implementation of an ERP system. Copyright # 2006 John Wiley & Sons, Ltd. Keywords enterprise information systems; enterprise resource planning; knowledge manage- ment; systems research; systems engineering; systems approach; MIS; management information systems INTRODUCTION product choice, provide more reliable delivery dates and better customer service, improve In today’s dynamic and unpredictable business quality, and efﬁciently coordinate globe demand, environment, companies face the tremendous supply and production (Li, 2000a; Li and Li, 2000; challenge of expanding markets and rising custo- Umble et al., 2003). In order to accomplish these mer expectations. This compels them to lower objectives, more and more companies are turning total costs in the entire supply chain, shorten to the enterprise resource planning systems throughput times, reduce inventories, expand (ERP). An ERP is a packaged enterprise-wide information system that integrates all necessary * Correspondence to: Yuan Li, School of Management, Xian Jiaotong business functions, such as product planning, University, Xian 710049, China. E-mail: liyuan@xjtu.edu.cn purchasing, inventory control, sales, ﬁnancial Contract/grant sponsor: NSFC; contract/grant numbers: 70121001; and human resources, into a single system with 70472039; 70571063. a shared database (Alavi and Leidner, 2001). Copyright # 2006 John Wiley & Sons, Ltd.
2. RESEARCH PAPER Syst. Res. A successfully implemented ERP can offer of an ERP implementation. These factors include companies the following three major beneﬁts top management support, business plan and (Yusuf et al., 2004): vision, organizational change management and culture, business process re-engineering (BPR), * Automating business process data accuracy, education and training, and ven- * Timely access to management information ´ dor selection and support, etc (Tchokogue et al., * Improving supply chain management through 2005; Kumar et al., 2003; Somers et al., 2004; the use of e-commerce Umble et al., 2003; Sheu et al., 2004; Motwni et al., In the past few years, thousands of companies 2002; Mabert et al., 2003; Al-Mudimigh et al., around the world have implemented ERP 2001; He, 2004). Although different authors systems. The number of companies that plan to may have their own diverse perspectives, they implement ERP is growing rapidly. AMR all consider that the most important factor Research, an authoritative market forecast insti- that inﬂuences successful ERP implementation tution in America, indicated that the ERP market is management, instead of technology; and would grow at annual rate of 37% in recent technology is only a minor factor. Thus, it is 5 years. The sales of the ERP packaged software especially important to investigate the issue of are estimated to be around $20 billion by the year how to enhance management in ERP implemen- 2000 and the eventual market size is predicted to tation process. be around$1 trillion by the year 2010 (Rajagopal, The process of implementing ERP begins with 2002). Even in China, a developing country, ERP planning. After planning is completed, a project has also become a main product in the software team embarks on and then moves through a market and the sales have approached six number of discrete phases. After the system is hundreds million RMB in the ﬁrst half of 2002 up and running, there may be a post-implemen- (Li, 2000b; Li et al., 2001; Chaudhry et al., 2005; tation review and later a stabilization phase Dan et al., 2005; Wang et al., 2005; Xu et al., 2005). (Parr and Shanks, 2000). In the model proposed Surprisingly, given the signiﬁcant investment in by Kwon and Zmud (Kwon and Zmud, 1987; resources and time, many companies did not Rajagopal, 2002), ERP implementation process achieve success in ERP implementation. It is can be divided into six stages: initiation, adop- estimated that the failure rate of ERP implemen- tion, adaptation, acceptance, routinization and tation ranges from 40 to 60% or higher (Umble et infusion (see Figure 1). The ﬁrst or the initiation al., 2003). Some surveys and researches indicate is characterized by both internal and exter- that successful outcome is also not guaranteed nal factors that inﬂuence the organization to even under ideal circumstances. Researchers implement an ERP system. At this stage, the consider that the factors such as organizational change and process re-engineering, the enter- prise-wide implications, the high resource commitment, and high potential business bene- Next Innovation Initiation ﬁts and risks associated with ERP systems make the implementation a much complex exercise ´ (Kumar et al., 2003; Tchokogue et al., 2005). It is Infusion Adoption therefore not surprising that numerous compa- nies have abandoned their ERP projects before completion or have failed to achieve their busi- ness objectives after implementation (Cliffe, Routinization Adaptation 1999). Many experts and scholars have investi- gated this issue from various angles. Some pro- vide valuable insights into ERP implementation Acceptance process and others identify a variety of factors that can be considered to be critical to the success Figure 1. ERP implementation process Copyright ß 2006 John Wiley & Sons, Ltd. Syst. Res. 23,157^168 (2006) 158 Yuan Li et al.