Understanding Enterprise System Customization: An Exploration of Implementation Realities and the Key Influence Factors

Abstract

From a strategic alignment standpoint, a clear link is desirable between strategic business goals and the specialization of business assets. The customization of an Enterprise System can be viewed as a specialization of an IT related business asset. Its customization should be driven by these strategic business goals. However, the implementation realities frequently tell a different story. Customizations are often not linked to strategic business goals and at times even run counter to these goals. Experiences have shown that these gaps can be costly and have severe business implications. Thus, it is important to understand how these discrepancies can occur, and subsequently, how to develop approaches to avoid unnecessary customizations. This qualitative study explores key influences on customizations in five major Enterprise System implementations. The analysis of the qualitative data collected in this study reveals key influence factors with their direct, as well as their indirect impacts on customization. The article further discusses how some of these influences can be leveraged by IT managers to guide customizations in a desirable direction.

Keywords:

• Enterprise Systems (ERP)
• customization
• strategic alignment
• case study

Notes

1. We follow the terminology used by Davenport (2000). While other researchers and professionals may prefer the term Enterprise Resources Planning (ERP) system, we believe that Enterprise System (ES) addressed the nature of these systems more adequately. “ERP” alludes to a certain range of functionality (extending MRP/MRP II systems) and does not necessarily represent the history and key characteristics of products of this type of information system appropriately. Interestingly, major vendors such as Peoplesoft and Oracle do not officially refer to their systems as “ERP” systems. The leading vendor, SAP, also has only recently labeled a subset of modules from its overall ES suite as “ERP.” In its previous R/3 line of products, SAP did not officially use the term ERP to label its products. Other events, such as the renaming of the AMCIS track “Enterprise Resource Planning” into “Enterprise Systems” for similar reasons, also support our choice.

2. ES also consist of basis modules and cross-functional components.

3. The term “customization” is not used consistently throughout the literature. Some vendors equate “customizing” mainly with configuration activities, while in other cases customization is referring to activities we label “modification.” Instead of “customization,” others have used, for instance, “tailoring” as the o4verarching term subsuming different types of alterations to a packaged system (Brehm et al., 2001).

4. It is possible, however, that changes in reserved tables are considered an unsupported modification by the ES vendor.

5. This process was required by most participants. It also provided the researcher with the opportunity to ask for clarifications.

6. Some interviews involved two participants.

7. One exception is perhaps the ES vendor relationship that requires mutual agreement from both sides.