Implementation Partner Involvement and Knowledge Transfer in the Context of ERP Implementations

Abstract

Enterprise Resource Planning (ERP) systems are difficult and costly to implement. Studies show that a large portion of the overall implementation cost can be attributed to consulting fees. Indeed, hardly any organization has the internal knowledge and skills to implement an ERP system successfully without external help. Therefore, it becomes crucial to use consultants effectively to improve the likelihood of success and simultaneously keep the overall costs low. In this article the authors draw from agency theory to generate a framework that explains how consultant involvement and knowledge of the implementing organization can impact the outcome of the project. Portions of the framework are illustrated by examples from a series of interviews involving 12 companies that had implemented an ERP. It is suggested that choosing the right consultants and using their skills and knowledge appropriately, as well as transferring and retaining essential knowledge within the organization, is essential to the overall success of an ERP system implementation.