Risk Factors in ERP Implementations: Hierarchical and Linear Relationships
Enterprise Resource Planning (ERP) systems have been in existence for over 2 decades yet businesses are still losing billions of dollars annually due to the implementation of software designed to reduce costs and increase profitability. Risk Management is an area that contributes to these losses, specifically due to uncertain outcomes when dealing with an interconnected construct such as risk, and a research gap at the tactical and operational levels between risks and controls. A comparative case study approach, encompassing 13 different ERP implementations, was adopted to explore emerging patterns at the project implementation level, and from this two contributions emerged. After observing risks behaving in a hierarchical fashion with predictable results, an exploratory Hierarchy of Risks model was constructed.