How factors affecting selection of implementation approach influence ERP system implementation costs

Different approaches on how to implement or deploy enterprise resource planning (ERPs) systems exist. Although virtually nobody really doubts importance of ERPs for running a business today, there is a sentiment regarding their implementation – both in terms of time and money. In this paper we investigate relationship between factors influencing selection of a specific implementation approach and companies’ ability to stay on budget when implementing ERPs. The question is: whether factors influencing implementation approach then affects to what extent ERP system implementation costs exceed planned costs for implementation. The questionnaire research, focused on this issue, was conducted in Denmark, Slovakia and Slovenia. Dependent variables were percentage of actual ERP system implementation costs and staying on budget vis-à-vis the planned costs and budgets. The independent variables were implementation approach, country, company size, information strategy, representation of the IT department on board level, and number of implemented modules. Main conclusions are that number of modules influences selection of implementation approach and companies with information strategy are more likely to stay on budget. However, implementation approach does not significantly influences implementation costs and clear relationships between factors influencing selection of implementation approach and costs for ERP implementation could not be found.