Identification and Assessment of Risks Associated with ERP Post-Implementation in China

Purpose – The purpose of the study reported in this paper was to identify, assess and explore potential risks that Chinese companies may encounter when using, maintaining and enhancing their Enterprise Resource Planning (ERP) systems in the post-implementation phase.

Design/methodology/approach – The study adopted a deductive research design based on a cross-sectional questionnaire survey. This survey was preceded by a Political, Economic, Social and Technological (PEST) analysis and a set of Strength, Weakness, Opportunity and Threat (SWOT) analyses, from which the researchers refined the research context and selected the State-Owned Enterprises (SOEs) in the Electronic and Telecommunication Industry in the Guangdong province as target companies to carry out the research. The questionnaire design was based on a theoretical risk ontology drawn from a critical literature review process. The questionnaire was sent to 118 selected Chinese SOEs, from which 42 (84 questionnaires) valid and usable responses were received and analysed.

Findings – The findings identified a set of 40 ERP exploitation risks, which concentrate around operational, analytical, organisation-wide and technical issues. The top 10 identified ERP risks and associated causes and consequences are discussed extensively in this paper. The study also explored and identified 10 statistical correlations between the risks identified.

Research limitations/implications – This study contributed to the knowledge of ERP in general, and provided valuable insights into ERP exploitation risks in Chinese SOEs in particular.

Practical implications – The findings can be used by practitioners for management and prevention of potential risks in ERP post-implementation.

Originality/value – The need for the research emerged from the growing awareness in the filed that there is a scarcity of studies focusing on ERP post-implementation, in contrast with an over abundance of studies focusing on implementation and project management aspects.