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The Strategic Impact of Enterprise Systems: A Dynamic Capabilities Study
Abstract
The move to enterprise systems (ES) and its extended applications is a prominent issue in the field of information systems (IS) (Kumar and Van Hillegersberg, 2000; Markus and Tanis, 2000). Featuring a central database, open system architecture, and business reference models, ES is a process-based commercial system that aims to integrate transactional information and business processes in a distributed business environment. Its implementation has influenced business operations in two significant ways. First, the integrated central database and open system architecture comprise an application information technology (IT) infrastructure that affects scope, feasibility, and flexibility in long-term organizational information support and system deployment. Second, ES imposes standard business models regardless of the idiosyncratic practice of the firm. The increasing ubiquity of ES, then, indirectly homogenizes operational processes within an industry and opens new avenues for electronic inter-organizational interaction and cooperation (Davenport, 2000; Kumar and Van Hillegersberg, 2000). The ES-imposed generic processes and the trend toward a single industrial IT application have caused great strategic concern to researchers and practitioners alike. Tom Davenport, one of the pioneers of ES and BPR research, speculates that homogeneous best practice in a single industry might lead to a lessening of the value of innovation in business process design (Davenport, 1998). Weill and Broadbent (2000) also question the strategic impact of standardized IS packages. While these questions imply that the pervasiveness of ES undermines any extraordinary advantage, empirical research has revealed various outcomes of ES adoption (Davenport, 2000; Kumar and Van Hillegersberg, 2000; Markus and Tanis, 2000; Bermudez, 2002). Yet despite increasing concerns about the business value associated with ES, systematic research on the strategic implications of ES is lacking. Most research on ES consists of anecdotal case studies that focus on system implementation processes and critical success factors, or deals with the multi-faceted impact of ES on business operation. Seldom, however, does the research examine the implications of ES transition.
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