The Role of Requirements Engineering in the Success of ERP Implementation in Petrochemical Industry in Saudi Arabia: A Research Proposal Essay
ERP systems are increasingly being adopted by Saudi Arabia’s petrochemical firms due to increased competition and the need to improve operational efficiency. Though there are various studies that highlight the importance of requirement engineering, frameworks that can be used in requirement engineering, the best practices in ERP implementation and critical success factors, studies on ERP implementation in Saudi petrochemical industry are non-existent. The proposed study will determine the role of requirements engineering in ERP implementation in the Saudi petrochemical industry employing interviews.
The study will highlight strengths and weakness of the approaches currently being adopted and highlight areas that need to be improved.
Competition is forcing many companies to seek strategies via which they can maximize their internal potential and efficiently use their resources. Enterprise Resource Planning (ERP) systems present organizations with platforms for improving the coordination of their operations and enhancing productivity. However, as an integrated business information system, the success and even efficiency of an ERP system is largely dependent on requirements definition and engineering (Ferratt, Ahire, and Prabuddha 2006, 458-460).
This proposal seeks to determine the role of requirements engineering in the success of ERP system in Saudi Arabia’s petrochemical industry.
The following are the main objectives of the study:
To determine the best practices in requirements engineering.
To determine the extent to which Saudi Arabia petrochemical firms adhere to best ASAP patterns in requirements engineering and success factors in ERP implementation.
To determine the factors that hinder effective requirements engineering by Saudi Arabia firms when implementing their ERP systems.
This is an exploratory study of the role of requirements engineering in ERP implementation within a Saudi Arabia petrochemical firm. The study seeks to determine the degree of conformance to best patterns and critical success factors by Saudi Petrochemical firms when implementing their ERP systems.
3.1. Petrochemical industry in Saudi
Saudi Arabia’s strategic role in global economics is largely attributed to the vast oil and natural resources that the nation has. For years, Saudi Arabia has been revered as the world’s largest petroleum producer. However, recent trends show that most petrochemical industry players are first diversifying their operations to include plastics and other forms of petrochemicals (Al-Morished 2005). This diversification of operation and appreciation of the potential presented by automation has led to a surge in the number of petrochemical firms that use automated information collection and analysis system. Nearly every petrochemical firm spends considerable proportion of its revenues on improving data collection and synthesis system (Al-Morished 2005). The large and dynamic supply chain that most petrochemical firms have has led to increased awareness on the importance of centralized management of information requirements thus the increased adoption of ERP systems within the industry.
3.2. ERP in Petrochemical industry
ERP systems are increasingly being adopted in Saudi Arabia due to operational requirements and increased competition by internal and external competitors. However, the adoption of centralized integrated information systems is an entirely new concept in the petrochemical industry (Al-Morished 2005). Most Saudi Arabia petrochemical firms buy off the shelf ERP systems that have not been tailor made to meet their operational requirements. Furthermore, the adoption of ERP systems in the petrochemical industry is a fairly recent phenomenon which presents the risk of poor understanding of the steps and considerations in requirements engineering (Al-Morished 2005).
3.3. Requirements Engineering
The efficiency of a software is measured by the degree to which it conforms to the objectives in its development. Requirements engineering encompasses determining the purpose, identifying the stakeholders, documenting the needs of different stakeholders, communication and implementation in a form of a conceptual design (Nuseibeh, and Easterbrook 2000, 1). Clearly, ERP systems serve different stakeholders within an organization, thus differences between the expectations and needs of the stakeholders has to be consider in the design phase (Nuseibeh, and Easterbrook 2000, 1).
Requirements engineering encompasses several considerations and processes and is therefore likely to be time and resource intensive. Failure in requirements engineering are carried on to software modeling and are in the end manifested in the resulting system. Changing such errors in an implemented system is far more costly than their incorporation in requirements engineering (Dowlatshahi 2005, 3751-3752). Moreover, the effect of a system that is perceived as faulty on an organization affects more than just execution of information management processes (Nuseibeh, and Easterbrook 2000, 2). Such faulty implementation could develop a negative perception of the ERP system and even result in resistance. It is imperative on organizations to ensure that their requirements engineering processes are formulated such that they add value to rather than complicate systems development.
A large number of projects fail because of poorly carried out requirements engineering processes. Without proper understanding of businesses processes or even the stakeholders that will be involved in a firm’s operations, there is a high likelihood that the systems that will be adopted by a firm will be faulty. It is therefore imperative on all project members to ensure that requirements engineering as a process in ERP implementation is carried out effectively (García-Sánchez, and Pérez-Bernal 2007, 294-296). Use of models that aid translation of real world user needs to programmable or systems level specifications is one of the avenues that are used to facilitate requirements engineering. Conceptual and business modelings are approaches that ease the definition of user needs and facilitate ERP implementation (Osei-Bryson, Dong and Ngwenyama 2008, 503-504). Other models and frameworks like the ASAP incorporate user needs definition as part of their capabilities. The ASAP provides a far wider and robust approach to requirements engineering when implementing an ERP system.
3.4. The ASAP Requirements Engineering Process
The ASAP Requirements Engineering (ASAP RE) process is a framework that is commonly used in defining the stakeholders needs and even documenting an ERP system (Daneva 2010, 2). It is noteworthy that the approach has been reported to be effective in most parts of Europe. Requirements engineering is mainly concerned with ensuring that a systems is delivered on time and within the budget, the expected architecture is delivered; the project resources are used efficiently and every stakeholder is happy (Daneva 2010, 1). Though achieving these goals is often difficult, the ASAP approach improves the likelihood of their attainment. The ASAP RE model is highly iterative and involves consideration on the development of ERP system as a program that is broken down into various subcomponents. Furthermore, the approach uses a cycle and prototyping approach where ERP systems development is looked as a continuous improvement process. ASAP Requirements Engineering involves systems identification, model design, data collection, program design, implementation, verifications, model validation, experimentations and output analysis (Daneva 2010, 2). Iteration between the different steps ensures that specifications are continually added as system capabilities are improved continually.
3.5. ASAP Requirements Engineering Patterns of Success
There are different patterns of success in ASAP RE. The positive patterns involve leveraging existing RE practices, development of data dictionary, introduction of standards at the beginning, understanding the nature of dependencies between processes and tools, systematic application of validation procedures, systematic address of controversial requirements and use of reference models (Daneva 2010, 3). The best patterns include complimenting validation walkthrough by using prototyping, evaluating and critiquing process designs before they are configured, using architecture models, taking actions to rewrite and eliminate requirements that cannot be verified, iterative refinement of non-functional requirements until they can be implemented as a set of functional requirements and setting up a conversion and interface handbook (Daneva 2010, 3).
The negative patterns are characterized by reliance on prototyping as an avenue to negotiating the requirements, sporadic use of traceability, skipping prioritization due to fear of restriction by implementers or lack of admission that requirements cannot be executed by team members and lack of interest in the requirements models by process owner which results in oversight of poorly specified requirements (Daneva 2010, 4). The worst patterns in ASAP RE are characterized by exclusive reliance on prototypes in negotiating requirements, lack of validation of reuse data control assumptions, lack of change impact analysis mechanisms, ignoring the use of models, not using data dictionary, lack of traceability policies and introduction of standards when the requirements engineering cycle has already been initiated (Daneva 2010, 4).
3.6. Requirements Engineering Process Improvement Methods
Inductive methods to improving processes in requirements engineering focus on the needs and expectations of the stakeholders. From considerations on the needs and expectations of the stakeholders, aspects that should be improved are induced and ported into the existing system requirements definition (García-Sánchez, and Pérez-Bernal 2007, 293-294). This approach ensures that the stakeholders’ expectations and needs are addressed effectively though it can be time consuming in cases where expectations shift. A prescriptive or model based approach to improving processes in requirements engineering is based on considerations on the specific model being adopted. Every model has best practices that highlight how processes should be carried out and critical success factors. By considering the specific model being adopted in implementing an ERP system, processes can be altered and other processes added to improve conformance to best practice and patterns in application of the model (Dowlatshahi 2005, 3746-3748).
3.7. Success IN ERP Implementation
Success in ERP implementation is a result of a combination of various success factors. It is noteworthy that success is assessed with reference to the objectives in implementing an ERP system. Therefore, the types of success are generally analyzed with reference to the efficiency in implementing the systems architecture, addressing the needs of different stakeholders, working within the budgetary allocations and developing an ERP system that efficiently integrates various operational requirements (Ching-Chien, Ping-Ho, and Chun-Chung 2006, 161-162). It is noteworthy that ERP systems are organization wide information systems and should therefore be carried out in a manner that involves all organizational stakeholders (Murray, and Cony 2001, 1013). An ERP system not only determines the nature of interaction within an organization but can also affect relationships and information flow to external organizational stakeholders. Clearly, there is a need for considerations on the critical success factors since a poorly implemented ERP system not only affects communication and coordination within an organization but could also result in operational inefficiencies that undermine performance.
Ensuring executive support and accountability measures are integrated into the endeavor is a critical success factor in implementing an ERP system (Murray, and Cony 2001, 1013). Executive support is critical for organizational endeavors especially if they represent a change process that may affect the entire firm (Osei-Bryson, Dong, and Ngwenyama 2008, 500-502). To effectively port change management considerations in ERP implementation, the executive management should be involved in every phase and formalized accountability measures have to be incorporated.
Another critical success factor is to ensure that business processes and functional requirements are well understood and incorporated in defining specifications before building or selecting an ERP product. Most ERP projects are abandoned because the systems specifications do not correspond to businesses activities and requirements. Requirements engineering comes in handy in ensuring that this success factor is addressed. It is noteworthy that ERP systems address business needs and should therefore be developed with business processes and existing strategies in mind.
Minimum customization is also considered a critical success factor in implementing ERP system (Murray, and Cony 2001, 1014). Required modification in ERP systems have to be identified before a system is implemented so as to reduce the costs associated with making changes on an operational system. This may require considerations on either developing an easy to implement system that is customized to an organization and therefore is inflexible or one that is flexible but with minimal customization. Flexibility is often awarded preference mainly because information needs and technology change quickly and businesses should be able to move with the changes (Murray, and Cony 2001, 1015).
ERP system development ought to be treated as programs rather than projects. Programs are ongoing, comprehensive integrated projects that allow for improvements (Murray, and Cony 2001, 1014). The program aspects of ERP systems seek to ensure that they are continually improved. Other success factors include organization wide training and education, setting realistic expectations and formulating realistic deadlines. Thus, the existence of support systems, objectivity and clear identification of stakeholders’ expectations are all critical (Murray, and Cony 2001, 1014-1015).
3.8. Critical Review
ERP systems are organization wide endeavors aimed at ensuring that organizations are well positioned to harness opportunities in their operational environments and generate competitive advantage. A critical review of ERP implementation within varied business segment reveals that value generation is a key motivator for most businesses (Perera, and Costa 2008, 2-3). ERP systems have been hyped as being effective in improving the levels of coordination that businesses can attain and having the potential to improve internal business operations. While it is true that ERP systems have the capability of changing an organization’s capability for the better, there is no doubt that poorly implemented ERP systems can burden an organization and even result in loss of efficiency. Therefore, ERP system implementation is a vital step in determining the effects that such systems will have on the competitive positioning of a firm and overall performance. This holds true for a large number of organization wide strategic efforts that have to be carried out with a thorough understanding of the challenges that businesses face and the critical success factors.
Centralization of information system requirements is a phenomenon that has slowly developed as a result of the realization that such approaches ease management requirements and allow for the incorporation of extensive security measures. A review of global developments in ERP systems reveals that they are highly influenced by change in technology and information security (Mendoza, Pérez, and Grimán 2006, 59-62). Furthermore, ERP systems are commonly adopted by relatively large organizations or those whose operations are spread across different nations or divisions. This implies that increase in operational complexity and requirements are in most cases the main reason why firms consider implementation of an ERP system (Chung, Skibniewski, Lucas, and Kwak 2008, 375-376). In cases where organizations already have centralized management of data for instance use of databases, this centralized management of data is often used as a platform for implementation of ERP system. This reveals that ERP systems are considered as improvements to the existing centralized information management strategies and further highlights the importance of developing extensible information management systems (Karimi, Somers, and Bhattacherjee 2007, 230-232). There are some organizations that adopt ERP systems as a result of security leaks in their systems. Organizations that have benchmarked their competitors are likely to implement ERP systems because their competitors have done so. This subjective approach to ERP implementation is prone to errors since there is a high risk of developing a subjective requirements definition.
Appreciating the fact ERP implementation is an organization wide endeavor is also important in improving the relevance of the strategies that businesses adopt in ERP implementation. ERP systems are integrated business systems that support various business activities for instance planning and customer relationship management. An ERP system provide a platform through which varied processes involved in resource planning and operations can be managed, assessed and made more effective (Osei-Bryson, Dong, and Ngwenyama 2008, 514-517). Therefore ERP systems affect all organizational stakeholders who must therefore be included in its initial formulation or design and subsequent improvement or upgrades. Failure to incorporate these vital requirements may results in ineffective ERP implementation strategies and may spell the downfall of an organization. Therefore inclusion of various stakeholders in designing an ERP system ensures that different requirements are captured and reduces the risks of subjectivity when formulating an ERP system.
The importance of inclusion of varied organizational stakeholders when designing an ERP system is brought out by considering ERP implementation as a strategic process. Business strategists stress on the importance of inclusion of employee in designing operational strategies because such efforts help ensure that employees develop appreciation of the changes emanating from the implementation (Martin, and Huq 2007, 125-126). Furthermore, inclusion of employees in any change process provides a wider platform for organizational learning and gain of knowledge that can be used in future developments. Inclusion strategies have also been shown to be quite effective in reducing the degree of resistance to change and facilitating change management (Ifenedo 2007, 38-39). It is noteworthy that change management is a key requirement for any businesses undergoing a change for it helps shape employees mind frame in readiness for the implications of the changes.
ERP system implementation often takes on a project or a program approach depending on the organization. A large proportion of organizations however carry out ERP implementation using the systems development cycle. This methodology has varied derivatives and may include iteration and prototyping depending on organizational preferences and capabilities (Pollard, and Cater-Steel 2009, 165-168). A review of critical success factors in a project approach reveals that proper management is a necessity that helps ensure that varied processes involved in the implementation of an ERP system are well coordinated. A project manager is also required to ensure that the set budget is adhered to by minimizing variance. Poor project management strategies in carrying out the implementation of an ERP system may result in systems that are ineffective, loss of organizational funds and reduced motivation among stakeholders involved in the formulation of the ERP system (Wei 2008, 170-172). The emphasis placed on choosing project managers with proper people and technical knowledge is due to the diverse requirements and processes that have to be considered in carrying out organization wide projects. Exhibition of leadership qualities helps in dealing with conflicting goals and opinions, troubleshooting and maintaining high levels of motivation among those involved in a project.
There are varied internal requirements that have to be met in carrying out any strategic process. ERP implementation is a strategic process for it involves planning, execution and evaluation. This implies that the requirements in strategic managements hold true for ERP implementation. Setting clear objectives that will form the basis for a strategic process is vital requirement addressed by requirements engineering in ERP implementation. In setting objectives that will be addressed in a strategic endeavor, it is important to consider the needs of different stakeholders and ensure that the goals are SMARTER (Nah, and Delgado 2006, 102-105). The later aspect aims at ensuring that the progress made towards attaining the goals is determined and any required corrective measures implemented in cases where there are dismal gains.
A review of requirements engineering reveals that it involves settings goals that will be attained and budgetary and operational constraints that have to be considered in the implementations of an ERP system. Clearly, this is a similarity in the tasks involved in the planning stage of strategic management which serves to raise questions on the strategic role of requirements engineering in ERP implementation. Requirements engineering is a process that culminate in a clear definition of the system that an organization will seek. On the other hand, the planning phase in strategic management results in a clear definition of the requirements that have to be addressed and how they can be addressed or the strategic directions (Plant, and Willcocks 2007, 61-62). Therefore, requirements engineering in ERP implementation appears to be a process through which planning requirements are addressed thereby ensuring that there are clear measurable objectives and the goals sought by an organization in implementing its ERP system are relevant to its operational needs. The emphasis placed on inclusion of varied stakeholders in either processes serves to reinforce this point.
Requirements engineering is process and information oriented. A review of the best and good patterns in the ASAP RE reveals that process level considerations play an important role in determining the efficiency of the requirements engineering process. Leveraging existing requirements engineering practices, understanding the nature of dependencies between processes and tools and systematic application of validation procedures all point to the emphasis placed on the process in carrying out organizational processes (Chung, Skibniewski, and Kwak 2009, 208-210). Complimenting validation walkthroughs and use of architectural models which are some of the characteristic of the best patterns in ASAP RE further serve to highlight the emphasis placed on the process in requirements engineering. Though the importance of strategic management is known to all organizations, there are still reported failures in carrying out the processes and requirements in strategic management.
The existence of best, good, bad and poor patterns in ASAP RE shows that though the processes involved in requirements engineering may be public there are different levels of conformance by organizations. Evidently, this brings about the importance of conformance to requirements in RE to overall gains of competitive advantage as a result of the implementations of ERP system. It is noteworthy that with the widespread adoption of ERP system in the petrochemical industry, the mere existence of an ERP system may not be enough to ensure that an organization develops a distinctive capability. In fact, poor requirements engineering may result in the implementation of ERP systems that are static and costly to an organization in terms of disrupting flow of activities and dealing a blow to the developed team chemistry. Evidently, requirements engineering from this dimensions can be an avenue through which businesses can ensure that they develop distinctive capabilities, cost cutting and a strong brand image that goes a long way in improving competitive advantage.
Technology is changing quite fast and so are the requirements that businesses have to consider in their operations. The dynamic macro-environment places immense pressure in businesses to continually review their systems and strategies (Newman, and Zhao 2008, 406-407). This effectively implies that businesses have to review their internal operations and internal systems to ensure that they are relevant to mitigating threats and harnessing opportunities presented by the macro-environment. Furthermore, the dynamism of the operational environments also implies that businesses have to develop their systems such that they can be expanded to meet changes in operational demands due to increase in the number of organizational processes and complexity of operations. A review of the best practices in ERP implementation highlights the importance awarded to a program approach and extensibility of an ERP system. Having a thorough understanding of such best practices is vital in ensuring that ERP implementation is well guided and the various risks of failures and inefficiencies are addressed (Peslak, Subramanian, and Clayton 2008, 31-32). Use of requirements engineering models help organizations that do not have a thorough understanding of the requirements and complexities associated with ERP implementation develop systems that are up to the required standards.
Though ERPM implementation and requirements has been analyzed from different viewpoints, there are still some areas that need research. Highlighting the requirements in best pattern and critical success factors in requirements engineering and ERP implementation respectively does not guarantee their adoption in practice. Industry specific factors may also impede the adoption of the critical success factors in the implementation of ERP system and requirements engineering (Zhao and Fan 2007, 166-167). Researchers ought to channel more efforts at ensuring that factors that may impede proper implementation of ERP system and requirements engineering are determined and corrective measures instigated.
The Saudi Petrochemical industry is affected by various internal variables that may affect the structures, processes and philosophies that are adopted. This implies that though there is research pointing to the role of requirements engineering in strategic management, aiding change management and developing competitive advantage, there may be industry specific factors that may result in different implications for requirements engineering in the Saudi Petrochemical industry. This implies that firm and industry specific studies have to be carried out to determine the effects and role of requirements engineering in ERP implementation. Such studies may result in accurate and reliable findings that may convince managers and other organizational stakeholder of the importance of proper requirements engineering when implementing ERP systems. It is noteworthy that the reliability of current studies is questionable because most studies derive arguments from strategic management and adopt qualitative methodologies that are prone to bias.
4.1. Academic Significance
Though there is evidence of research on requirements engineering, success factor in implementing ERP systems and increased adoption of ERP system in Saudi Arabia’s petrochemical industries, no study has sought to determine if petrochemical firms adhere to the best practices in requirements engineering. The proposed study will seek to address this gap in the existing studies and highlight avenues through which petrochemical firms in Saudi Arabia can correct their approaches to ERP implementation.
4.2. Practical Significance
Moreover, the study will promote research on the adoption of ERP system and their implementation in this industry which will ensure continuous improvement. This will result in improved performance and corresponding benefits to Saudis through improved GDP earnings. The findings from the study will highlight aspects that need to be changed by Saudi firms in requirements engineering when implementing their ERP systems.
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