Enterprise System Flexibility and Implementation Strategies: Aligning Theory with Evidence from a Case Study

Abstract

Flexibility can have important consequences for the operational efficiency and long-term effectiveness of an enterprise system, yet is often not considered explicitly as a decision factor during system design and implementation. In this article, we join managerial advice for implementation strategies with insights from a theory that determines the flexibility requirements of an enterprise system in relation with characteristics of the business process that the system is intended to support. We align our theoretical considerations with practical evidence from the case of an electronic procurement system that was implemented at a Fortune 100 firm. Based on our findings, we present a roadmap that can guide flexibility and implementation strategies based on both project and process characteristics.

Keywords:

• enterprise system
• flexibility
• implementation
• project management
• electronic procurement system
• case study
• business process characteristics

Notes

1. At an operational level, the issue of flexibility has been acknowledged in discussions of the pros and cons of standard off-the-shelf systems versus customized systems (Brown & Vessey, 2003; Grossman & Walsh, 2006, Soh & Sia, 2005): While an off-the-shelf system, in particular when implemented “vanilla style” without much process-specific customization, tends to allow for rapid deployment as well as easy upgrades, it often provides a suboptimal fit with the operational procedures of the firm and may require considerable organizational changes. In contrast, customized development can provide a better fit with the operational procedures of the firm, yet often results in a system that is more risky to implement and more complicated to maintain and upgrade. While the first option tends to be favored by consultants and project managers, the second option is typically the choice of the users (Soh & Sia, 2005).

2. In practice, a trade-off between both types of flexibility can often be observed. For example, to the extent that an enterprise system provides flexibility-to-use, it is also likely to provide a good fit with the respective organizational processes, often as a result of considerable customization and configuration that are performed during project implementation that might again lead to greater efforts required for subsequent changes. In comparison, flexibility-to-change tends to be associated with the extent to which an enterprise system can be easily extended and upgraded. Flexibility-to-change may result from the use of a standard, off-the-shelf solution and limited customization, as well as from the implementation of an open and highly modular system, based, for example, on innovative architectures, such as service-oriented computing. Both approaches to flexibility-to-change tend to come at a cost: Standard off-the-shelf implementations often provide a limited “natural” fit with the business processes that the system supports, which may result in the need for process adjustments (McAfee, 2006, Soh & Sia, 2005), or frequent system work-arounds (e.g., manual operations). Technology innovations, such as service-oriented architectures, while possibly providing a better fit with the individual business processes, tend to be complex, risky because of technology immaturity, and require significant investments for initial implementation and ongoing operation.