Explaining ERP Failure in Developing Countries: A Jordanian Case Study

Abstract

Enterprise resource planning (ERP) systems are increasingly being adopted by organisations in developing countries. As in industrialised countries, this adoption seems beset by significant rates of failure, leading to a large waste of investment and other resources. This paper seeks to understand why ERP failure occurs.

In doing this, it moves beyond the factor lists that have so-far dominated analysis. Instead, it makes use of the "design-reality gap" model. This conceptual framework aims to be comprehensive but also contingent; sensitive to the specific conditions of any individual client organisation.

The design-reality gap model is applied to a case study of partial ERP failure in a Jordanian manufacturing firm. The model analyses the situation both before and during ERP implementation. It finds sizeable gaps between the assumptions and requirements built into the ERP system design, and the actual realities of the client organisation. It is these gaps – and the failure to close them during implementation – that underlie project failure.

The paper draws conclusions about good practice in ERP implementation relating to both risk identification and risk mitigation, and offers examples of both specific and generic actions that can be undertaken. But it also notes challenges existing in some developing country contexts that may continue to constrain the effective use of enterprise resource planning systems.