Abstract—The advancement of information system led era
and increased competition have forced SMEs to reengineer and
integrated their business processes for better efficiency and
productivity. The SMEs has begun to look into the potential of
implementing enterprise software systems in adding value
towards their businesses. Thus, the objective of this paper is to
investigate the cost drivers of ERP implementation among the
Malaysian SMEs through three main classifications: enterprise,
people and implementation. Second, the study has also
examined the relationship among each one of the classifiers –
enterprise, people and implementation. This was aimed at
identifying if each one of the factors were significant in
influencing the others. This study examines the objectives, via
an exploratory survey of 111 companies based in Klang Valley,
Malaysia. The findings has revealed that the major cost drivers
for ERP implementation among the Malaysian SMEs were
caused by the external ERP consultants, upgrading of skills
among the employees, reengineering of business processes and
the selection of ERP modules. The data and our analysis points
out that people factor such as consulting experience and their
involvement with the internal employees have a major impact
on the ERP cost. The results have also shown that there is a
significant correlation between the two cost classifiers – human
resource and implementation. This study provides an avenue
for further exploration on the financial aspects of ERP
implementation which could have an impact on the return on
investment (ROI).
Index Terms—Enterprise resource planning, small and
medium sized enterprise (SMEs), business process, consultant.
Mahadevan Supramaniam is with the Taylor’s University, Malaysia
(e-mail: mahadevan.s@taylors.edu.my).
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Cite:Mahadevan Supramaniam, Azween Abdullah, and Ramachandran Ponnan, "Cost Analysis on ERP System Implementation amongst Malaysian SMEs," International Journal of Trade, Economics and Finance vol.5, no.1, pp. 72-76, 2014.