Enterprise Resource Planning Readiness Assessment for Determining the Maturity Level of ERP Implementation in the Industry in Indonesia

A R T I C L E I N F O A B S T R A C T Article history: Received: 16 November, 2020 Accepted: 19 January, 2021 Online: 28 January, 2021 The textile industry is one of the prioritized industries, because it contributes to the country's foreign exchange, absorbs a large number of workers, and fulfills the need for national clothing. To increase work efficiency and productivity, the textile industry must use ERP. However, ERP implementation still has a relatively high failure rate. ERP readiness assessment is one of the main issues to achieve success in implementing ERP. Previous research is still limited to research about readiness for achieving success in ERP implementation. The research results have indicated that the maturity of the organization is a very significant dimension with a weight of 43.51%. By knowing the maturity level of the organization for ERP implementation can identify factors that become weaknesses for organizations to take corrective steps, so as to reduce the failure rate of ERP implementation in the industry. This research methodology uses a quantitative approach using R software to determine the principal component analysis and uses the Order Preference Technique with the Ideal Solution to weighted the identified factors. This research aims to determine organization readiness by developing the maturity level of ERP implementation in the industry in Indonesia which conducted a case study experiment in the textile industry in Indonesia. The result of this research is the development of an ERP readiness assessment to assess the maturity level of the organizations in ERP implementation.


Introduction
The textile industry is one of the industries that is prioritized for development because it has a strategic role in the national economy, namely as a contributor to foreign exchange, absorbing large numbers of workers, and to meet national clothing needs. To increase work efficiency and productivity, the textile industry must use ERP. ERP can improve the performance of an organization, but until now the ERP implementation for the industry still has complexity with a high failure rate, so this causes implementation costs to be expensive. Referring to previous research, the ERP readiness assessment can assess the readiness of an organization in implementing ERP. ERP readiness assessment can be reviewed from the perspective of top management, project management, people, change management, technical requirements [1]. By identifying the weaknesses factors of the organization, management can develop ERP readiness assessment and make an evaluation to increase the organizational maturity level according to best practice [2][3][4][5]. The contribution of this research is the development of an ERP readiness measurement tool to increase the effectiveness of ERP implementation strategies for the industry, so that management can know the level of company readiness before making decisions for ERP implementation. Based on previous reseach, ERP implementations have a failure rate of 60% to 90%. The problem solution is to identify critical success factors in ERP implementation with a focus on organization, technology adaptation, and business processes [6,7]. Also, by assessing the readiness of the organization, it can be evaluated the weaknesses and strengths of the organization to adapt to change, so that the company can achieve organizational agility and ERP implementation success [8][9][10]. Previous research shows that there is still little research that discusses the maturity assessment ASTESJ ISSN: 2415-6698 of an organization before top management decides to implement ERP. The development of ERP readiness assessment is one of the main issues related to achieving success in implementing ERP. This research can help the top management of an organization or consultant party to assess the maturity level before deciding to implement ERP with a discussion of four perspectives such as processes, people, organizational, and technology which based on the development of the Leavitt Diamond Model [11]. The four components of Leavitt Diamond Model are people, tasks or processes, technology, and structure or organization prominent success factors for improving industry performance. This matter is considered for organizations to assess the readiness level of an organization in implementing ERP, so that top management of the organization can find out the factors that are the weaknesses and strengths of the organization, to be able to make improvements, so that the relatively expensive investment value can achieve successful ERP implementation for an industry. This research explain identify the factors of ERP readiness assessment and the characteristics of the maturity level of the organization in ERP implementation. This is the novelty of this research which is the development of previous research to help the top management of the industry to find out the readiness of a company to adapt to a change in order to achieve the best practices and agile organizations..

Experimental procedure
The experimental procedure of this research uses a study case in the textile industry in Indonesia by using a quantitative approach technique with R software to determine the Principal Component Analysis (PCA) [12]. The objective of PCA is to reduce the data dimension by eliminating the correlation of variables by transforming the original variable into a new uncorrelated variable so that the data can be interpreted. PCA is a non-parametric method that uses linear algebra to extract relevant information or patterns from a dataset with multivariate attributes. This research also use of Technique for Order Preference Technique with the Ideal Solution (TOPSIS) method to identify the weight factors. The TOPSIS method approach can be used as an ERP assessment tool to determine the weighting and ranking of factors for the main weight, the weight of sub-factors, and the final weight. TOPSIS is a decision-making method for ranking and prioritizing Multi Criteria Decision Making (MCDM). The stages of weighting the TOPSIS method are as follows [13]: 1. Building a normalized weighted matrix using the following formula: Building a weighted normalized matrix by multiplying the normalized matrix with the weighting value of entropy weighting, with the normalization formula for the weighting matrix v as follows: In processing the data of this study, the authors collected data from respondents using a questionnaire method. Then based on the results of the questionnaire, the authors validated the data using PCA. The results of data processing from PCA are to develop indicators as a basic concept in developing the ERP readiness assessment model. Based on the literature survey, the authors classify be indicators associated with these four dimensions. Based on the literature survey, the authors mapped the main variable (processes, people, organizational, and technology) with sub-variables and indicators related to the readiness of ERP implementation [14][15][16][17][18]. From the results of the literature survey, it was found that 24 sub-variables and 61 indicators affect organizational readiness in ERP implementation. Then the authors define indicators and make questionnaire statements, then the authors distribute data to respondents using a questionnaire method. A list of sub-variables, defining indicators and questionnaire statements can be seen in Table 1. Changes in business processes to achieve successful ERP implementation.
3 Business processes redesign

PR03
Redesigning the business processes of an organization to best practice processes.
It is necessary to redesign business processes based on best practice business processes. Cultural change management is a concern to successfully implement.
Cultural change management must be done to ensure the change process runs well. There is a project team that has technical expertise, understanding of business processes, knowledge of ERP processes, and ERP project experience.

19
Involved Business Process Owner

PE19
The involvement of a Business Process Owner in the project team to map and manage business processes according to ERP selected.
The involvement of a Business Process Owner in the project team to map and manage business processes according to the ERP that will be implemented. Project champions are needed in ERP implementation, because project champions are people who can be relied on and trusted in ERP implementation activities.

OG27
Project champion can ensure implementation processes run or the possibility of project success.
The project champion is needed to ensure the implementation process runs well and also determines the success of the ERP project.

OG28
Project champion in an ERP implementation is fundamental in implementation.
Project champion is fundamental in ERP implementation. Performance measurement of ERP projects specifically in the planning, implementation, and post-ERP implementation processes.
Specific ERP project performance measurement in the planning, implementation, and post-ERP implementation processes is essential.

OG33
Performance measurement of ERP projects that the measurable results of each stage of implementation.
Measurable ERP project performance measurement at each stage of ERP implementation is needed OG34 Performance measurement of ERP projects that the ERP implementation is achieved.
ERP project performance measurement that pays close attention to the target of achieving ERP implementation must be considered.

OG35
Performance measurement of ERP projects that the relevant results according to the company's vision and mission.
ERP project performance measurement must pay attention to the results that are relevant to the company's vision and mission.

OG36
Performance measurement of ERP projects that the performance of the ERP project in accordance with a predetermined target time.
ERP project performance measurement must be in accordance with a predetermined time schedule.

30
Monitoring of performance OG37 Focused on customer need. ERP project performance measurement results should focus on customer needs.

OG38
Controlling for implementation schedule. The performance control process is indispensable in ERP implementation.

31
IT Governance OG39 Focus on IT governance with concerned to information quality. IT governance must pay attention to the quality of information generated by ERP.

13
Knowledge Management 32 Knowledge sharing process OG40 Knowledge sharing process can greatly improve employees' ability to learn and manage knowledge.
The process of knowledge sharing is needed in an effort to improve employee learning skills and manage their knowledge.

33
Data and information standarized OG41 Ensure information standarized in all business operations. Data and information standarizedon all business operations supports the use of ERP.
14 Organizatio nal structure 34 Centralization OG42 Activities of an organisation, planning and decision-making are controlled by the top management and project manager.
Planning and decision-making activities that are controlled by top management and project managers are required in ERP projects.

35
Specialization OG43 Specialization is a business strategy that focuses on specialized production for increasing productivity with ERP use.
A business strategy that focuses on specialized production is needed to increase productivity with the use of ERP.

Formalization OG44
Formalization as a process to define procedures, standardization processes, responsibilities, and completely documented.
Organizational formalization is needed in ERP implementation as a process in determining procedures, standardizing work processes, and fully documented responsibilities.

37
Size of organization OG45 The success of ERP projects may be impacted by organization size.
The size of the organization affects the success of an ERP project.

CIO position OG46
CIO's role is to determine the alignment of business and technology, ensure the availability, accuracy, accuracy and security of information as needed to achieve the organizational goals.
The role of the Chief Information Officer (CIO) is needed to determine the alignment of business and technology, ensuring the availability, accuracy, accuracy, and security of information according to management needs to achieve organizational goals.

39
Top management commitment OG47 Involved in every step of ERP project, monitor the progress ERP.
Top management must be involved in every process and monitor the progress of the ERP project.

OG48
Focusing on top management's commitment and willingness to provide sufficient resources.
Top management commitment is needed to provide adequate resources and achieve a successful ERP implementation. Communicating all activities in the ERP implementation process to all parties involved is very important.

OG50
Sign off as proof of the communication and agreement on project work.
Sign off as proof of communication and agreement on ERP project work must be approved by the parties involved.

41
Organizational culture OG51 Organizational culture determines the right way to attitude and make changes, including with regard to ERP implementation.
Organizational culture determines the right way to behave and make changes in ERP implementation.

42
Vision and mission

OG52
The clear of vision and mission as a guide ERP implementation.
A clear organizational vision and mission guides the implementation of ERP implementation.

OG53
A clear vision and mission must be revealed and communicated into an important part that will support the ERP project.
A clear organizational vision and mission must be revealed and communicated to all parties involved to support the implementation of the ERP project. 16 Organizati onal strategy 43 Goals and objectives OG54 Identification of measurable goals, the formation of the project organization, and the motivation of the project team.
The process of identifying measurable goals, establishing a project organization, and the motivation of the ERP project team are important factors in supporting ERP implementation.

OG55
Define and must be communicated effectively among stakeholders involved.
Project objectives and objectivity must be defined and communicated effectively to the stakeholders involved.

OG56
Determine the scope of the ERP project. Determination of a clear ERP project scope will determine the success of ERP implementation.

OG57
Confirming the ERP project for determine target of go live time.
All ERP project activities must be confirmed with all parties involved in order to determine the target time to go live.

OG58
Budget usage needs to be controlled rigorously throughout the ERP implementation.
Budget usage needs to be strictly controlled during ERP implementation.

OG59
Project planning implementation can reduce the risk for the failure.
The implementation of project planning can reduce the risk of failure in ERP implementation.

OG60
Project planning implementation requires the availability of complete resources.
ERP implementation project planning must have complete resource availability.

17
System rollout 45 Rollout system TH61 Rollout system is a structured set of processes to anticipate events that cause ERP implementation setbacks.
A system rollout function to anticipate things that cause ERP implementation setbacks must be available. Determine the software, hardware, and network infrastructure that will be needed for the ERP system.
Determining the correct software, hardware and network infrastructure is needed in ERP implementation.

TH64
Adequate IT infrastructure, hardware and networking for ERP implementation.
It is necessary to conduct an assessment of the adequacy of IT infrastructure, hardware and networks before implementing ERP.

48
Processes improvement

TH65
Process improvements need to be identified before the implementation of ERP.
Identification of process improvements must be done prior to ERP implementation.

TH66
Information usable that provides benefits that support decision making related to ERP projects.
Useful information is needed to support decision making in ERP projects.

49
Data management TH67 Data comprehensive that supports decision making related to ERP projects.
Complete data comprehensively supports decision making in ERP projects.

TH68
Data availability as needed to support decision making related to ERP projects.
The availability of data that is suitable for management needs for decision making in ERP projects is needed.

19
IT structure and legacy systems 50 IT structure TH69 IT team structure to coordinate ERP project activities from planning to post-go live.
Good IT team structure to coordinate ERP project activities from planning to post-go live. System acceptance TH73 Acceptance of users to use ERP in completing work will increase the work more effective and efficient.
Acceptance of users to use ERP in completing work and improving a more effective way of working is very important 55 System usage TH74 The use of information technology can improve the performance of the organization.
The optimal use of information technology can improve overall organizational performance.

22
Trouble shooting 56 Helpdesk system TH75 The available of a helap system to help users in providing fast response in troubleshooting related to ERP use.
The availability of a helpdesk system will help users quickly solve problems related to the use of ERP.

57
Service to users TH76 The available of an IT team to serve users in providing troubleshooting related to ERP use.
The availability of an IT team that provides services for users and provides solutions to problems related to the use of ERP is very much needed. Inter-departmental networks that are interconnected to meet material requirements for other departments or for customers are very necessary in ERP.
The characteristic of CMMI is initial, defined, managed, measured, and optimized [19]. Initial: Unpredicable, uncontrolled, no-automation. Defined: Some shared decision-making. Managed: Collaboration, analyze trend, and portfolios. Measured: Central automated process, standardized across the organization. Optimized: Focused on continuous improvement, stability provides a platform for agility and innovation. The related between characteristic of maturity level with readiness of ERP readiness assessment module, which can be seen in Figure 1. The grouping of people readiness variables is derived into 7 sub-variables and 18 indicators can be seen in Figure 3.
The grouping of organizational readiness variables is derived into 9 sub-variables and 25 indicators can be seen in Figure 4.  The grouping of technology readiness variables is derived into 8 sub-variables and 17 indicators. The grouping of technology readiness for each sub-variables and indicator can be seen in Figure 5.

Data processing of the questionnaires
As a result of distributing questionnaires to respondents, Authors made a characteristics profile of respondents which can be seen in Table 2. The authors grouping indicators the data collection to organizational readiness in ERP implementation, by determining the following components to Gender: The authors included gender components because it can influence in emotions in decision making in the data collection according the character of the respondents. Age: The authors included age components because it can influence decision making in the data collection according to work experience from respondents. Work experience: Authors included work experience components because it can influence maturity in decision making in the data collection according the work experience using ERP from respondents. Educational background: The authors included educational background components in the data collection because it can affect the level of maturity in decision making. Position: Authors included a position components because it can influences the maturity level in decision making. Industry type: Authors included industry type components in data collection because it can be comparison of the data processing result. The authors forward to test of 61 indicators using the multivariate Principal Component Analysis (PCA) statistical approach using R software, which meets the following requirement, namely the pvalue must be less than 0.05, and the Measure of Sampling Adequacy(MSA) value must be greater than 0.5. The results of PCA data processing using software R show that Kaiser-Meyer Olkin (KMO) = 0.866, where all indicators have "KMO > 0.5", so it can be interpreted that the KMO value has requirement. The results of data processing from the PCA test show that 61 indicators from into 24 Release Candidate (RC) with the sum of the squared loadings (SS Loadings) achieve contributes 83% cumulative variable. The SS loading value is the result of automatic calculation from the R software. Based on RC results of PCA data processing using R software by calculation for more than one of eigen value (SS Loading > 1) achieved at a cumulative variable 83% with RC is 24, this is the optimum value calculated achieve cumulative proportion 100%. The release Candidate result can be seen in Table 3. Based on the results of R software data processing for 24RC, the authors analyze for finding the highest value of each indicator, then the authors classify according to each of RC with create a new group for 24RC. The PCA result of data processing using R software can be seen in Table 4.

ERP readiness assessment factors
Based on the results of PCA data processing using R software, the authors identify a new name for the sub-variable of each RC can be seen in Table 5. Then the authors continue to analysis with the weighting of 61 indicators using TOPSIS method where the name of the grouping for 24 sub-variables is based on the highest score for the preference score. The results of the TOPSIS processing for 10 the readiness factors that affect the success of ERP implementation are as follows: cross functional support (9.87%), project champion (9.14%), communication (7.82%), vision and mission (6.98%), transfer knowledge (6.97%), process improvement (5.98%), project planning (5.19%), vendor engagement (5.13%), commited to change (4.12%), and open minded for changes (4.05%). The results of the weight of ERP readiness assessment can be seen in Table 5. The results of data processing using TOPSIS, found that organizational variables have the main weight of 43.51%, variable technology has the main weight of 25.03%, variable people have the main weight of 22.06%, and variable processes have the main weight of 9.40%. Thus, the organizational variable is a very dominant variable that determines the level of readiness in implementing ERP for the textile industry in Indonesia. The main weight of variables can be seen in the Table 6. Meanwhile, the teen sub-variables that have a significant main weight can be seen in the Table 7.

Measuring the level of organizational maturity
Based on the weighting of 24 indicators which are the results of data processing using TOPSIS, the authors make a list of questions as a basis for designing an ERP readiness assessment module. The list of assessment questions is in the form of a rubric assessment with the maturity level of the Capability Maturity Model Integration (CMMI) model with being considered the characteristic of initial, defined, managed, measured, and optimized with the readiness of process, people, organizational and technology. The list of Rubric Maturity Assessments can be seen in Table 8.
This rubric assessment will be a reference for the top management or the consultant to test each department involved to get good feedback before implementing ERP for the industry. The budget usage that must be strictly controlled during ERP implementation has not been defined The use of budgets that must be strictly controlled during ERP implementation has been determined The use of budgets that must be strictly controlled during ERP implementation has been standardized in the SOP The use of budgets that must be strictly controlled during ERP implementation has been socialized The use of budgets that must be strictly controlled during ERP implementation has been evaluated for improvement The vision and mission of the organization that was revealed and communicated to all parties involved to support the implementation of the ERP project has not been defined The vision and mission of the organization that was revealed and communicated to all parties involved to support the implementation of the ERP project has been defined The vision and mission of the organization that was revealed and communicated to all parties involved to support the implementation of the ERP project has been defined, & have been standardized in SOPs The vision and mission of the organization that was revealed and communicated to all parties involved to support the implementation of the ERP project has been defined, & have been socialized The identification of process improvements before ERP implementation has not been identified The identification of process improvements before ERP implementation has been identified The identification of process improvements before ERP implementation have been standardized in SOPs The identification of process improvements before ERP implementation have been socialized The identification of process improvements before ERP implementation have been evaluated for improvement

Conclusion
The ERP implementation process for the industry has a high complexity, which will risk a high failure rate. However, the problem of the complexity of ERP implementation in the textile industry can be resolved by identifying readiness factors that focus on four main components such as processes, people, organizational, and technology before implementing ERP. Thus, the organizations can identify weaknesses and anticipate improvements, thereby increasing the success rate of ERP implementation. The research result shows that the score of organizational variable is 43.50% and the domain factors that influence ERP readiness assessment with significance factors are project champion (9.14%), cross-functional support (9.87%), project planning scope (5.19%), vision and mission (6.98%), and communication (7.82%). For this reason, it is necessary to develop of ERP readiness assessment, so that the managerial level can easily analyze the maturity level of the organization that need to be improved. The author realizes that this research has limitations in conducting case studies in the textile industry. For this reason, this research can be continued with case studies in the wider industry, and this research can also be developed by developing an ERP readiness assessment module as an information system for the management level in deciding to continue implementing ERP.