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Keywords Information systems, Process efficiency, Resource efficiency, Technology led strategy, Organizational change
Abstract Enterprise systems packages have long been associated with process change. However, it was assumed that most organizations would simultaneously design and implement process change while implementing the systems. A survey of 163 organizations and detailed interviews with 28 more suggests that enterprise systems were still being implemented even among early adopters of the technology, and that process change was being undertaken on an ongoing basis. After the prerequisites of time, critical mass of functionality, and significant expenditures were taken care of, the factors most associated with achieving value from enterprise systems were integration, process optimization, and use of enterprise-systems data in decision making.
Introduction
In the mid- to late 1990s, many large corporations undertook one of the most ambitious information systems projects in their histories: the implementation of packaged enterprise systems (ES - also known as enterprise resource planning, or ERP systems). ESs are packaged software applications (from vendors such as SAP, Oracle, PeopleSoft, and J.D. Edwards) that connect and manage information flows within and across complex organizations, allowing managers to make decisions based on information that truly reflects the current state of their business. These systems also automate complex transaction processes and thus have the potential to reduce costs.
Conventional wisdom of the time dictated that companies implementing ES should undertake simultaneous changes in their businesses (Davenport, 1998). As they configured and implemented their systems, they should have been reengineering their business processes, restructuring their organizations and changing management processes to take advantage of new data. The substantial time, money, and internal resources necessary to implement an ES (White et al., 1997), however, made process change during implementation difficult. While a few firms were successful in "changing everything at once", most found it very demanding, and some failed altogether (Radosevich, 1998; O'Leary, 2000). In many cases - particularly those involving organizations trying to meet Y2K deadlines - getting the system in became the only objective, eliminating the possibility of any real business change.
For a time, ESs seemed forgotten as companies shifted focus to e-commerce and other business matters. But leading organizations are revisiting the original promise of ESs, and taking actions now to realize the value they need from...