Customer Satisfaction as a Critical Success Factor for ERP Design

Jamie Plunkett and Craig M. Gelowitz

Faculty of Engineering and Applied Science, University of Regina, 3737 Wascana Parkway, Regina, Canada

Keywords: Enterprise Resource Planning, Balanced Scorecard Approach, As-Is To-Be Methodology, Critical Success

Factors, Small and Midsized Enterprise, Customer Satisfaction Analysis.

Abstract: Enterprise Resource Planning (ERP) systems have been an important tool in managing business processes in

corporations worldwide. This paper briefly looks at some popular business process analysis methodologies

such as Balanced Scorecard and Critical Success Factors (CSF). It also includes a customer satisfaction

analysis as a supplementary mechanism to design and implement an ERP system for small to mid-size

enterprises (SMEs). In addition to the traditional metrics, customer satisfaction is included as a critical success

factor that drives the changes to business processes and provide insight into the design of an effective ERP

for an SME.

1 INTRODUCTION

Enterprise Resource Planning (ERP) systems are

software systems that are utilized to manage all

aspects of operations within a corporation (Kiran &

Reddy, 2019). ERP systems typically focus on

vendors, accounting, human resources, sales,

customer service, inventory, purchasing and

production planning departments. All of these

individual areas and departments are linked through

an ERP system in order to get valuable information

on internal business processes and company

information in a consistent and timely fashion.

Small and Mid-sized Enterprises (SME) are

businesses that generally consist of companies with

less than 250 people on staff within a given location

(Alaskari et al., 2021). In much of the world, SME’s

have a notable impact on the economies of countries

and contribute to a significant portion of gross

domestic product (GDP) internationally (Genc et al.,

2019).

Previous to the development of ERPs, many

companies would utilize decentralized systems to

manage their business processes. This can lead to

undesirable situations where individual departments

are the only ones with access to information other

departments might urgently need (Elbahri et al.,

2019).

https://orcid.org/0000-0002-2300-3189

For example, a centralized ERP system can enable

a sales department representative, in response to a

customer query, to easily check the database of the

inventory department and give feedback in real time.

If a product is not in the inventory, the inventory

department can do a purchase request immediately.

Or, if a product is to be manufactured internally, the

by-products can be purchased and preparation can be

made to get that product manufactured for the

customer. Throughout the entire process the customer

can be provided valuable time sensitive information

on what stage the product is in before it is ready for

shipping or pickup.

Utilizing an ERP system allows an accounting

department to get information on all transactions and

process them accordingly. Billing can be sent to

customers, while vendor accounts can be handled

simultaneously and all in real-time. Vendors are able

to send in their invoices and those invoices can be

reconciled with what is on the ERP system and then

processed for payment.

The human resource department can manage the

corporate workforce and make decisions based on the

jobs coming in from the Sales and Production

Planning department. This information indicates the

production output levels required which can drive the

necessary staffing levels. An ERP system can also

maintain a database of available staff, their work-load

as well as those recently interviewed.

114

Plunkett, J. and Gelowitz, C.

Customer Satisfaction as a Critical Success Factor for ERP Design.

DOI: 10.5220/0011065700003179

In Proceedings of the 24th International Conference on Enterprise Information Systems (ICEIS 2022) - Volume 2, pages 114-118

ISBN: 978-989-758-569-2; ISSN: 2184-4992

An ERP system can maintain inventory listing

information that may be valuable for price

comparisons and approval of purchase orders. This

can also be important for formulating price indices for

future analysis.

An ERP can also be utilized to keep track of

customers. Customer data whether prior, present or

future, can be used for marketing and promoting a

business.

2 ANALYSIS METHODOLOGIES

2.1 Balanced Scorecard

The Balanced Scorecard is a management model and

tool that was designed to help corporations measure

their performance (Frederico et al., 2021). The main

parameters are:

1. Financial

2. Customers

3. Business Process

4. Learning and Growth

The “Financial” parameter looks at the actual

monetary gains made throughout the period being

analysed. The “Customers” parameter takes a broad

look at the customer’s overall experience with the

organization and enables changes to be made to

improve customer interaction and satisfaction. The

“Business Process” parameter deals with process

management. It includes an analysis to check if

internal processes are up to par with current standards

while also determining if any processes can be

improved. The “Learning and Growth” parameter

deals with companies making improvements,

learning from mistakes and improving. It also relates

to understanding the customer experience as a whole.

For implementation of an ERP system, the

balanced scorecard approach can be used in the

assessment stage.

2.2 As-Is and To-Be Business Process

The As-Is methodology is a process map used to

record business processes in an organization (Elragal

& Haddara, 2012). After recording the step-by-step

business processes, an analysis can be done to see

where potential improvements can be made.

Before implementing an ERP system, an analysis

of business processes can be made. Subsequently, a

To-Be map can be generated that describes the future

business processes based on the ERP modules that are

to be incorporated.

2.3 Critical Success Factors

Critical Success Factors (CSF) look into the activities

of a company that are required for a company to be

successful (Vargas & Comuzzi, 2020). Often, the

critical success factors for an SME are considered to

be parameters related to internal metrics such as:

1. Project team competence and composition

2. Vendor and consultant support

3. Business process reengineering and minimal

customization

4. Software development testing

5. End user involvement

6. User training and education

7. Clear goals and objectives

8. Monitoring and feedback

2.4 Customer Satisfaction as a CSF

Maintaining customer satisfaction is an important

part of any business. Consumer buying patterns can

be influenced by the level of customer service

obtained which then leads to customer loyalty (Adam

et al., 2020).

Previous studies have also found that parameters

like product quality and price perception have a

significant impact on customer satisfaction and

customer loyalty (Hudaya, 2020).

This research postulates that in addition to the

common critical success factors for SMEs, customer

experience and satisfaction can be utilized as a CSF

for help in both designing and evaluating the

effectiveness of an implemented ERP system.

3 INITIAL PROCESS ANALYSIS

To conduct this research and obtain some practical

and real-world results, a local auto repair shop and

SME in Regina Saskatchewan agreed to participate in

this research and implement a subsequent ERP

design.

An initial mapping of the process flow of the

business helps one understand the business

operations, both for software design insight as well as

to see where operations can be improved upon

(Parhizkar & Comuzzi, 2017). During this step, the

focus was on the “Business Process” parameter of the

Balanced Scorecard approach as well as the

“Business process reengineering and minimal

customization” of the Critical Success Factors

methodology.

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115

Included in this analysis is the determination of

problems that could be solved to help improve

customer satisfaction. Some of the problems

identified for the SME were:

1. Customer documentation filed manually

2. Billing and documentation done manually

3. No notice board to keep staff aware of

activities at the establishment.

4. No organized price list

5. No employee records filed

6. Accounting done manually

7. No system in place to handle increased

workload, which leads to delays in customer

service.

Through utilizing the assessment methodologies

of the Balanced Scorecard model and Critical Success

Factors the additional success factor of customer

satisfaction was also included. In order to explore this

more fully, an analysis of customer responses from a

list of customer survey questions relevant to customer

satisfaction were also measured and evaluated to

include in the overall analysis. To accomplish this, a

survey with 17 questions relating to customer

satisfaction was created and sent out to previous and

current customers of the SME. 34 customer surveys

were completed and gathered for analysis.

The 17 questions included a 5-Point Likert Scale

ranging from Strongly Disagree to Strongly Agree

that attempts to determine levels of customer

satisfaction. For example, the following are five

questions that were included in the survey:

a) Would you say this company has a high

level of efficiency?

b) Would you say you have gain a high level of

satisfaction with our team in resolving your

issue?

c) Would you say this company delivers

customer service at a high-speed?

d) Based on your experience, would you agree

to returning to us again to do business?

e) Based on your experience, would you agree

to recommending us to others?

4 SURVEY ANALYSIS

Some of the analysis of the customer surveys

indicated that:

1) A majority of the customers like the staff

2) A majority of customers indicate that the

efficiency is not at a high level

3) A majority of customers indicate that the

customer service is not at a high level

4) A majority of customers believe price levels

are too high

5) A majority of customers feel phone calls are

not answered in a timely manner.

6) A majority of customers do not have a high

level of satisfaction

7) A majority of customers would not

recommend the company

8) A majority of customers do not feel updates

are communicated in a timely manner

9) A majority of customers do not feel there are

multiple methods of payment available

10) A majority of customers do not feel the

booking process was an easy process

11) A majority of customers do not intend to

return to do business or recommend the

business to others.

Figure 1: Survey Question Response Graph.

With the data from the customer satisfaction

survey and the internal issues that were found from

the As-Is analysis, a To-Be process map could then

be created. To-Be flow charts were then developed

with the ERP implementation in mind to aid in the

To-Be map of the future business processes.

5 ERP DESIGN

Based on the analysis in the previous section and

discussion with the owner of the SME, the design of

an ERP for the business was developed to improve

the business processes as well as improve customer

satisfaction. The design included things such as

customer history, accounting tools, cost analysis

tools, human resource management and a system to

handle processes that will hopefully cut the delay

time for customers.

The up-front implementation of theses analysis

methodologies allowed for the ERP to be designed

and developed to address issues uncovered through

the analysis which included both internal processes

and their potential effects on customer satisfaction.

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This allows the ERP design to both address the

internal business process issues as well as addressing

the customer satisfaction issues simultaneously.

The customer satisfaction survey also provided

insight into internal issues that may not have

otherwise been picked up on without this type of

analysis such as:

1) The ERP design allows office staff to take a

customer’s query and at the same time record

the customer’s information and post all

correspondence to the ERP.

2) Appointments can now be organized within

the ERP. All this is done in an orderly fashion

and can be done quickly.

3) The ERP enables a customer work queue that

is automatically generated. The mechanic can

look at his workstation and see the request and

appointments for the day and can assess the

vehicle in real time.

4) After assessment, a note can be made in the

ERP system and the mechanic can move on to

assessing other vehicles in the queue. This

enables staff to give customers feedback on

the assessment of their vehicles immediately.

5) Quotes can also be generated and customers

can decide how they would like to proceed.

6) Deposits and/or payment through the ERP

with functionality to take many payment types

based on the customer`s preference.

7) Mechanics can work on vehicles and update

the ERP in real time so when customers make

a query, staff can provide updates to customers

in real-time. When situations change, staff can

also call or email customers with updates.

8) As soon as the vehicle is ready, the balance of

payment can be collected, the ERP updated,

and a survey sent to customer to measure

customer satisfaction. As customer

satisfaction is continually measured, a

continual improvement business process is

established through the ERP design.

9) Customer issues with the price may have been

caused by the office not doing a proper cost

analysis per job. The ERP system design has

an accounting module as well as a human

resource module attached that will enable

management to do cost analysis before

pricing. This includes monitoring expenses

and knowing the cost of goods sold before

generating any customer pricing.

10) The human resources module includes other

available staff such that as the work load rises,

additional man power can be utilized such that

the level of customer service is maintained.

8 CONCLUSION

Utilizing customer satisfaction analysis as a critical

success factor provides additional information that

shapes the resulting design of an ERP system. The

ERP is then designed to improve the internal business

processes in addition to addressing improvements in

customer satisfaction.

The ERP implementation in this paper was

intended to both improve the internal business

processes while simultaneously improve customer

satisfaction. This included addressing such things as

efficiency, speed, price, payment methods, real-time

status updates, marketing, and appointment

processing as well as maintaining a process for

continual improvement through ongoing customer

satisfaction input.

Analysis utilizing the Balanced Scorecard and

traditional Critical Success Factors can be important

for an ERP design. As an additional measure, a

customer satisfaction analysis provides both context

and further insight into the potential effectiveness of

an ERP design for improving an SME’s business.

Future research work will include the SME

utilizing the aforementioned ERP design for a year.

Following that period, another customer satisfaction

analysis will be done to gather data and try to

understand if the improvements in customer

satisfaction have been achieved. The management

and staff will also be surveyed to determine if the ERP

system has led to any significant improvement in their

business processes and customer satisfaction from

their unique perspective.

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