Explaining ERP failure in a developing country: a Jordanian case study

Abstract

PurposeEnterprise 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 such ERP failure occurs.Design/methodology/approachThe paper moves beyond factor lists to make use of an overall “design‐reality gap” model. The model is applied to a case study of ERP failure in a Jordanian manufacturing firm, analysing the situation both before and during ERP implementation through a mix of interviews, observation and document analysis.FindingsThe research finds sizeable gaps between the assumptions and requirements built into 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 ERP project failure.Research limitations/implicationsThis study shows the relevance and applicability of the design‐reality gap model to understanding ERP failure. Further research can be undertaken applying the model to other ERP cases, including case studies of success.Practical implicationsThe paper draws conclusions about good practice in ERP implementation relating to both risk identification and risk mitigation, which must be based on closing design‐reality gaps. It offers examples of both specific and generic actions that help to achieve this. But it also notes limitations existing in some developing country contexts that may continue to constrain the effective use of enterprise resource planning systems.Originality/valueThe paper provides a new model for understanding ERP project success and failure, and for practical risk mitigation. The design‐reality gap model aims to be comprehensive but also contingent; sensitive to the specific conditions of any individual client organisation.