ERP Competence-Building Mechanisms: An Exploratory Investigation of Configurations of ERP Adopters in the European and U.S. Manufacturing Sectors

Authors:
Andrea Masini;Luk N. Van Wassenhove
Affiliations:
Department of Management Science and Operations, London Business School, London NW1 4SA, United Kingdom;Technology and Operations Management Department, INSEAD, 77305 Fontainebleau, France
Venue:
Manufacturing & Service Operations Management
Year:
2009

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Abstract

This paper contributes to the literature on enterprise resource planning (ERP) by pursuing two objectives. First, it identifies configurations of ERP adopters that have similar needs and develop similar competencies. Second, it tests the hypothesis that, to maximize benefits from their ERP projects, organizations should align their ERP competence-building mechanisms with the ERP needs that arise from their operational environment. The analysis of a sample of manufacturing companies that implemented ERP between 1995 and 2001 uncovers four distinct configurations representing different degrees of fit between needs and competence-building mechanisms: the frugal ERP, the extensive business process reengineering (BPR), the adaptive ERP, and the straitjacket. The results support our hypothesis and suggest that the consequences of a misfit between needs and competence-building mechanisms are more severe for companies that operate in complex and dynamic environments and have informal organizational structures than for firms with rigid structures that operate in simple and stable environments.