Impact on the Research Agenda
Charles Møller
Department of Business Studies, Aarhus School of Business,Fuglesangs Allé 4 DK-8210 Aarhus V, Denmark
Center for Electronic Business, San Francisco State University, 1600 Holloway Avenue, San Francisco, CA 94132-1722
Keywords: Enterprise Systems, Management, Innovation.
Abstract: This paper proposes that ERP-implementation lead to a new post-implementation management challenge:
Enterprise Systems Management and Innovation. Enterprise Systems Management and Innovation is a new
concept that deals with the management of the enterprise system as a resource, and as a potential for
transforming the organization by enabling innovative supply chain processes. The argument is rooted in
seven case studies, a survey on ERP adoption and a retrospective analysis on the development of ES. This
paper discuses the emerging issues and the implications for management. The paper concludes by outlining
the impact on the ERP research agenda.
Few IT innovations have had as much impact on
business organizations in recent years as Enterprise
Resource Planning (ERP). ERP systems are
standardized software packages that can be
configured to manage every aspect of an
organization within any business. Here Enterprise
Systems (ES) are used as a more broad and generic
term than ERP.
It is estimated that organizations worldwide have
spent around USD18.3 billion every year on ES in
recent years (Shanks, Seddon, & Willcocks, 2003).
The adoption of ERP is often explained as phases or
waves (Willis & Willis-Brown, 2002). During the
first phase of ERP, the organizations struggle to
implement ERP and get the internal processes in
place. There has been a lot of interest in and critique
of ERP based on this phase, but attention has now
shifted from implementation issues towards post-
implementation. During a “second wave”
implementation the organizations deploy their new
tools in order to create and sustain competitive
advantage. This will often imply the integration of
processes in the supply chain.
Most organizations today are required not only
to establish effective business processes but they are
required to accommodate for changing business
conditions at an increasing rate. Many business
processes extend beyond the boundary of the
enterprise into the supply chain and the information
infrastructure therefore is critical. The rationales of
integrating ERP and SCM have been explored by
Tarn, Yen and Beaumont (Tarn, Yen, & Beaumont,
2002). They conclude that the industrial trend is that
ERP is becoming a subclass of a much larger and
broader enterprise business system or in general
Enterprise Systems (ES).
Today nearly every business relies on their
Enterprise System for process integration and the
future generations of Enterprise Systems will
increasingly be driven by business process models
(Dumas, Aalst, & Hofstede, 2005).
A recent published survey shows that the factors
most associated with achieving value from ERP are
integration, process optimization and use of the ERP
systems in decision-making (Davenport, Harris, &
Cantrell, 2004). Davenport and Brooks (Davenport
& Brooks, 2004) argue that ERP systems are
internally focused, but the greatest impact of ERP is
felt in the supply chain.
In a very broad sense we are facing an evolution
where businesses increasingly are focusing on their
external processes driven by a new breed of process-
aware enterprise systems. This presents a
tremendous management challenge, not only to
manage this new IT resource but also to deploy this
resource in the supply chain. It has been argued that
this is a new field and this paper will argue that we
are facing an emerging challenge regarding the
management of enterprise systems that include
Møller C. (2006).
In Proceedings of the Eighth International Conference on Enterprise Information Systems - DISI, pages 87-94
DOI: 10.5220/0002473500870094
business process innovation using advanced
enterprise system.
The arguments are established using the lessons
learned from seven Danish ES cases. The case
studies were initially prepared for a management
textbook on ERP implementation (Rikhardsson,
Møller, & Kræmmergaard, 2004). Here the cases are
used in an approach to illustrate the general pattern
of post-implementation issues.
The cases are presented in and ES and ES
adoption perspective. In the next sections the ERP
industry and the adoption of ERP in the Danish
market are summarized. Then the impact of the
ERP-implementation in seven specific organizations
is analyzed in the following chapter. Finally the
implications are discussed and in the conclusion the
impact on the ES research is suggested.
The notion of standard ES/ERP systems has
developed drastically during the last five years due
to the impact of the web technologies, among other
things. In order to fully comprehend the systems it is
necessary to look at the industry in a 50-year
The industrial Enterprise Resource Planning
(ERP) market showed a positive growth in 2003
after years of decline, precipitated by the Y2K craze.
The worldwide market for ERP solutions to discrete
and process manufacturers was USD 9.10 billion in
2003 and is forecasted to be over USD 12.00 billion
in 2008, growing at a Compounded Annual Growth
Rate (CAGR) of 5.7 per cent over the next five
years, according to a recent ARC Advisory Group
The concept of ES has often been explained
through the evolution of ERP (Chen, 2001; Klaus,
Rosemann, & Gable, 2000; M. Lynne Markus &
Tanis, 2000; Wortmann, 1998). The concept of
Enterprise Systems (ES) has evolved over almost
fifty years, driven by the changing business
requirements, new technologies and software
vendors’ development capabilities.
In this section the development of the ERP
market is analyzed from a technical point of view.
There are several sources describing this evolution.
This analysis is based on (Charles Møller, 2005;
Wortmann, 1998; Wortmann, Hegges, & Rolfes,
The root of most of today’s ERP systems may be
traced back to the fifties. In the fifties the first
inventory control systems were designed along with
invoice processors. This was the first wave of the ES
which was spurred by the appearance of the first
commercial computers which again triggered the
field of operations management to develop
mathematical models for planning and control (the
inventory control models).
During the sixties those systems spawned off to
sales and purchase systems as well as production
planning systems. When the bill-of-material was
invented and standardized, IBM introduced the
COPICS specification. This specification enabled
IBM to design their mainframe MRP package
COPICS (now TGF 2000) and later on MAPICS
(now an independent company). The MRP
techniques fuelled the second wave.
During the seventies the MRP systems were
“state of the art”, and APICS framed the
implementation wave “the MRP crusade”. MRP
systems were refined into MRP II. This was the first
time standard systems were successful but soon the
next wave hit the systems. During those days a
couple of former IBM employees founded a small
software company called SAP.
The Computer Integrated Manufacturing wave
hit industry in the eighties. The driver behind CIM
was the microcomputer, and the business value of
CIM was the automation of processes. Some CIM
projects went well but quite a large number of
projects didn’t. One of the important lessons learned
was the complexity of integration.
With the emergence of Enterprise Resource
Planning (ERP) in the nineties integration became an
issue. This development peaked in the early nineties
with the advent of the standard ERP systems – often
embodied in SAP R/3 (Bancroft, Seip, & Sprengel,
1997) along with other major vendors such as
Oracle, Peoplesoft, JD Edwards and Baan – the so-
called JBOPS. Although the ERP systems have other
legacies like accounting, the planning and control
philosophies are rooted in manufacturing.
ERP is a standardized software package
designed to integrate the internal value chain of an
enterprise. An ERP system is based on an integrated
database and consists of several modules aimed at
specific business functions. According to Nah (Nah,
2002) the American Production and Inventory
Control Society (APICS) defines ERP as: “a method
for the effective planning and controlling of all the
resources needed to take, make, ship and account for
customer orders in a manufacturing, distribution or
service company”. This definition emphasizes the
business purpose of the system.
The ERP market experienced a hype as a result
of the Y2K problem, but after Y2K the ERP market
soured, as it was doubted that traditional ERP could
meet the e-business challenge (Mabert, Soni, &
Venkataramanan, 2001). New vendors of “bolt-on”
systems like e.g. i2 Technology with SCM and
Siebel with CRM emerged on the scene (Calloway,
2000). Application Integration (EAI) became a
serious issue (Themistocleous, Irani, & Keefe, 2001)
and new delivery and pricing methods like ASP
(Application Service Provider) and ERP rentals were
conceived (Harrell, Higgins, & Ludwig, 2001).
The ERP II concept is a vision originally
conceived by Gartner Group in 2000. Gartner
Group, who also tagged the ERP concept, define
ERP II as “a business strategy and a set of industry-
domain-specific applications that build customer and
shareholder value by enabling and optimizing
enterprise and inter-enterprise, collaborative-
operational and financial processes” (Bond et al.,
ERP II includes six elements that touch on the
business, the applications and technology strategy:
(1) the role of ERP II, (2) its business domain, (3)
the functions addressed within that domain, (4) the
kinds of processes required by those functions, (5)
the system architectures that can support those
processes, and (6) the way in which data is handled
within those architectures. With the exception of
architecture, these ERP II elements represent an
expansion of traditional ERP (Bond et al., 2000).
ERP II includes (Charles Møller, 2005): Supply
Chain Management (SCM); Customer Relationship
Management (CRM); Supplier Relationship
Management (SRM); Product Lifecycle
Management (PLM); Employee Lifecycle
Management (ELM) and Corporate Performance
Management (CPM). So in conclusion, ERP II is
essentially componentized ERP, e-business and
collaboration in the supply chain.
Throughout the ERP industry this new
philosophy of ERP and e-business has been
gradually incorporated into the ERP systems and the
system architectures were redesigned and
modularized, e.g. like SAP intends it with the
NetWeaver platform, like Oracle intends with the
Fusion platform, and like Microsoft intend with their
Dynamics platform. Therefore the contemporary
standard systems do incorporate ERP II. The ERP
industry survived the challenge and recent market
analyses do not render any signs of market
Today all the major vendors have adopted the
ERP II concept, either partly or fully. The evolution
is driven by emerging business requirements and
new information technology as it has been argued in
the preceding chapters was the case of the evolution
of ERP. The technologies are not necessarily the
inventions of ERP vendors, rather the technology is
sourced from the market as components, e.g.
application frameworks (.NET or J2EE), databases
(Oracle or MS SQL) or Decision-Support Systems
(DSS) from third-part vendors, but when
incorporated in the ES, the business benefit
It has been argued that people, structure,
realignment and change management will prove
more important to fulfilling the ERP II vision
(Weston, 2003). In all the cases in this study the
process change was the main driver of the second-
wave projects and most important, the ERP II
concepts has enabled the transformation of the ERP
systems into general ES driven by process
models(Dumas, Aalst, & Hofstede, 2005).
We now have a new and better understanding of
the ES technology as developed by the ES industry.
The next step of the study is to understand the
adoption of this new technology.
2.1 The ES Market and the
Adoption of ES
The ES market and the vendors are important not
just because of their systems, but because their
research reports and the vendors’ consultants have
an enormous impact on the business decisions made
in companies adopting ES. The ES market is
however quite complex for the following four
reasons (C. Møller, 2005):
1) The ES market is not well-defined.
Sometimes it includes all kinds of enterprise
application software and sometimes only ERP. The
total 2002 revenue of the ERP vendors was USD 20
billion according to AMR Research, but the total ES
spending may be 5-10 times higher.
2) There are significant commercial interests in
defining, segmenting and measuring the market. The
authoritative sources of market sizes and segments
are large research organizations such as Gartner,
IDC, AMR Research or Forrester.
3) The market’s units of measurement are
unclear Sometimes the market is measured in
installed base, new license sales or total revenue.
According to Gartner Dataquest (June 2003) the five
largest ERP vendors in 2002 based on software
license revenue were 1) SAP (25.1%); 2) Peoplesoft
+ JD Edwards (9.2%); 3) Oracle (7%); 4) SAGE
(5.4%); and 5) Microsoft Business Solutions (4.9%).
4) The market is quite dynamic. The vendors are
constantly merging and consolidating. Since the
Gartner Dataquest report was published, Peoplesoft
bought JD Edwards, Oracle bought Peoplesoft and
Microsoft acquired Encore and tried to buy SAP.
Finally the systems are constantly developed, and
some of them are discontinued.
A different perspective on the ERP market is the
enterprise perspective: what systems do they have,
what do they invest in, and when do they acquire or
update their systems?
A recent survey on ERP in large Danish
Enterprises (C. Møller, 2005) concluded that (1)
ERP has become a pervasive technology; (2) ERP
has become a contemporary technology; (3) the ERP
market has matured; and (4) the dominant ERP
strategy is still the single vendor strategy. The study
was based on telephone interviews with ERP
managers in 88.4 per cent of the top-500 enterprises
in Denmark.
ERP has been adopted by Danish enterprises in
general. 93.4 per cent of the large companies had an
ES of some kind, and 13.6 per cent of the enterprises
had more than one ERP system. Only 6.6 per cent of
the companies have not adopted ERP, their financial
performance is poor, and their number is decreasing.
There is a large group of companies, however, that
do not invest actively in ERP as well as a group of
businesses with aging ERP. Based on theoretical
studies we would have expected to find an aging
ERP base and a flourishing e-business market,
which, however could not be detected in the study.
ERP is the pervasive infrastructure because it is
so widely adopted. Based on the high percentage of
adopters and based on the non-adopters’ accounts
we conclude that ERP as a technology is a
prerequisite to run any business, and that it should
be considered an infrastructure rather than a new
technology. Therefore it will be interesting to
explore how the adopters have implemented and
developed their capabilities based on ERP.
However, it can not be concluded that the businesses
have developed streamlined, internal logistics
processes just because they’ve adopted ERP.
ERP is a contemporary technology because the
installed base is renewed. Based on the average age
of the systems (2.8 years), it is concluded that the
ERP technology now follows the normal IT
lifecycle. There are differences, however: the in-
house developed ERP systems are still to be
considered a legacy technology. The overall
conclusion is that the latest releases and technologies
are available to in the enterprises and is waiting to
be used. However it cannot be concluded that the
advanced collaborative supply chain functions have
been adopted and deployed.
ERP adoption is stable, because the market is
consolidated. Based on the adoption level, the
vendors’ market shares and the average systems’
age, it is concluded that the ERP market has
matured. Indications are that we end up with one
(SAP), maybe two or three major vendors, a handful
of global vendors, and a small number of vendors
specializing in specific industries or countries. A
similar pattern was found among the systems
suppliers and implementation consultants. This was
further reinforced by the fact that on average ERP
investments are below 1 per cent of the revenue.
However, it can not be concluded that the ERP
market is no longer innovative.
ERP adoption is converging towards a dominant
design due to the facts mentioned above. Only 13.6
per cent of the companies use more than one ERP
vendor. This indicates that the businesses pursue a
“single-vendor” strategy rather than a “best-of-
breed” strategy. Consequently, the new ERP II
functions are provided by the major vendors’
systems, and add-on modules or third part bolt-on
systems may only have a limited scope. This may
imply that supply chain planning will be dominated
by, e.g. SAP APO (Advanced Planning and
Optimization) modules, and consequently that the
reference models provided by the major vendors will
be the future supply chain templates. This might
imply that the variety in the applied logistics
concepts is reduced to the standards defined by the
major vendors. However, it can not be concluded
that inter-organizational integration will be much
easier with enterprises using the same platforms.
The general conclusions of the survey is that
large companies now have a common platform
based on the large vendors (in particular SAP) and
that the platform is kept up to date with the most
recent release. This conclusion conforms to the
experiences from the described cases. The survey
also supports the “continuity view” put forward by
Markus, Petrie and Axline (M. Lynne Markus,
Petrie, & Axline, 2000) who present a
complementary “discontinuity view” deemphasizing
ERP enables close cooperation among supply chain
partners facilitating supplier-customer interactions
and minimizing transaction costs (Tarn, Yen, &
Beaumont, 2002). However, there is a risk of ERP
actually hampering progress in SCM (Akkermans,
Bogerd, Yücesan, & van Wassenhove, 2003).
Nonetheless, it is becoming clear that the greatest
impact of, and payback from, ES is in SCM
(Davenport, Harris, & Cantrell, 2004).
ERP researchers recognize the time-gap between
impact and effect (Shang & Seddon, 2002). The
benefits from ES implementation are best
understood in a lifecycle perspective. Several
authors applied a lifecycle view on ERP
implementation (Rosemann, 2003). The proposed
lifecycle models (Bancroft, Seip, & Sprengel, 1997;
M. Lynne Markus & Tanis, 2000; Ross & Vitale,
2001) all emphasize the pre-implementation phase,
have less details on the post-implementation phase
and almost nothing on the use of ES. Ross and
Vitale (2000) describe an ERP journey as a
prisoner’s escape. The stages in the ERP journey are
(1) design, (2) implementation, (3) stabilization, (4)
continuous improvement, and (5) transformation.
The last stages: continuous improvement and
transformation are sometimes referred to as second
wave or the post-implementation stages. It is in the
post-implementation stages we find the impact of
ERP in the supply chain.
For many reasons most ERP research is
concentrated on implementation issues. An overview
of ES-related research showed that about 30 per cent
of publications deal with implementation issues
(Klaus, Rosemann, & Gable, 2000).
In a recent book on ERP (Rikhardsson, Møller,
& Kræmmergaard, 2004) the ERP journey of seven
organizations was analyzed. These organizations all
implemented their ES around year 2000, and they
are now evaluating the impact. In the following their
experiences are summarized.
3.1 Cases
Lego Company is the well-known toy manufacturer.
Before launching their ERP project Lego had a large
number of legacy systems throughout their supply
chain. The ERP project was accelerated due to poor
financial results of 2000. One of the reasons was the
inability of the existing supply chain to adapt to
market demands. The major part of Lego’s annual
sale to consumers takes place at Christmas. With the
existing supply chain set-up, Lego was unable to
respond to market dynamics. During 2000 a large-
scale project aimed at replacing the existing systems
with a custombuilt ERP system based on
standardized global processes and Oracle was
introduced. By the end of 2000 the project was
abandoned and replaced with a new project based on
standard SAP. This project was concluded
successfully in 2001 with a new ERP platform called
LEGO Light. This project was followed by a number
of second wave projects aimed at improving process
effectiveness. Lego top-management has highlighted
ERP with an IT and process-governance structure,
which include sourcing considerations. The new
projects are driven by the people from the ERP
implementation team by with an emphasis on the
combination of process development and IT.
The municipality of Copenhagen (KK) is one of
the largest organizations in Denmark with 43.000
employees (FTE). KK implemented Oracle almost
ten years ago. The first wave was oriented primarily
towards the back-office function of financial control.
In 2001 KK initiated a second-wave project aimed at
e-procurement and project management, among
other things. One of the challenges was that these
projects touched on the more marginal actors in the
supply chain. For instance actors like small day-care
centres and their suppliers, who previously acted
independently from KK, were now included in the
scope of the ES. KK approached this project by
setting up a team focused on process development –
not as an IT implementation project. Consequently
the change was managed as a learning process, but
following the standardized new ES processes. This
enabled KK not only to implement the new modules
but also to unleash the energy of new ideas for
Martin Professional develops and manufactures
intelligent lighting for the entertainment and
architectural markets. The founder of Martin, a
charismatic entrepreneur was replaced by
professional management in 1999 when the success
and growth was about to choke the company. Since
the existing legacy systems (very rudimentary
systems) could not cope with Y2K, an ambitious
plan for implementing a new ERP platform based on
Baan was launched in 90 days. With some disruption
the ERP system was in place throughout the group
by the end of 2001 when Martin started their venture
into second generation projects. This, of course,
included new modules but also a lot of different
“best-of-breed” systems, like Business Intelligence
(BI), Supply Chain Management (SCM) and many
others. It also included the implementation of a
different ERP platform (Axapta) in the sales
companies forcing Martin to reconsider and unify
their ES architecture. One of the problems is
integration issues when deploying more platforms.
Dell took a different approach to integration in
the supply chain. Dell set out early in the nineties
with an ambitious SAP project. In the mid-nineties
Dell abandoned the ERP path after some heavy
investments resulting only in a functional HR
system. Dell developed a new strategy called G2
where they specified the architecture of the ES in
Dell’s supply chain. The essence of this architecture
is an ES based on Enterprise Application
Integration. The outcome of this strategy is Dell’s
ability to rapidly deploy new business models and
closely coordinate and integrate with partners in the
supply chain.
Hydro Automotive Structure (HAS) is a first-tier
supplier in the automotive supply chain. HAS is part
of the Hydro Group; they develop and manufacture
aluminium components for the automotive industry.
As a supplier HAS have limited influence on the
business model and must conform to the
requirements of the dominating actors. In 1999 HAS
replaced an old industry-specific system and was
facing a group policy on SAP as a preferred vendor.
Due to the cost and resource requirements of a SAP
project, HAS selected Axapta from Microsoft
Business Solutions and a small local consulting
company to run the implementation. After a long-
winded implementation process, the system was
operative in 2000 and HAS started their quest for
process improvements. Today they have developed a
high-performing, integrated supply chain and they
are, for example, able to track and trace every piece
of material. A lot of the process improvements are
actually not a result of the ERP system (e.g.
KANBAN) but HAS are convinced that the ERP
system has provided the platform for the
Bang & Olufsen (B&O) is a manufacturer of
high-end audio/video equipment for the consumer
market. B&O has been through a long phase of
process improvements due to a near-fatal financial
situation in the eighties. This includes outsourcing a
high number of activities and therefore B&O depend
quite heavily on their supply network and have
developed exceptional partnerships with suppliers
and customers over the years supported by in-house
developed IT systems. Y2K made B&O decide to
replace their customized legacy system with SAP.
The implementation of the finance and HR modules
went very well but logistics and production planning
presented considerable problems. B&O developed
“Mass-Customization”-inspired processes for
manufacturing customer-unique products, and the
implementation of SAP would jeopardize this
process. When B&O had to make a stock
announcement on an expected loss due to problems
with SAP, they got SAP’s full attention leading to
the development of a B&O solution which later
became part of the standard system. Today B&O is a
happy SAP user seeing it as a strategic platform for
B&O’s development. Recently they have started
integrating the supply chain planning further by
using the APO (Advanced Planning and Optimizer)
Fritz Hansen (FH) is a manufacturer of exclusive
design furniture. The furniture includes designs from
architects such as Arne Jacobsen and Piet Hein. FH
has used Movex, an ERP system from Intentia, since
1993; in 2000 they decided to upgrade their systems.
FH used to be a traditional furniture manufacturer
but due to the success of designer furniture they
were forced to outsource a number of activities. Also
they put an emphasis on demand management.
Consequently supply chain coordination was high on
the agenda, and modules like product configuration
and supplier management were critical to FH. FH’s
ES ended up as a combination of an ERP system, a
CRM (Customer Relationship Management) system
and a data warehouse. As a consequence of the new
ES platform FH has been transformed from a
traditional manufacturing company to a
decentralized, process-oriented organization where
collaboration takes place across the entire supply
chain. In particular the use of smaller suppliers to
create flexibility is mainly a result the ERP platform.
3.2 Lessons Learned
The cases are alike in the sense that the motivation
for introducing ERP was almost identical. Y2K
combined with a need for a common platform drove
management to move into ERP. Also the expected
benefits from ERP conform to Ross and Vitale’s
motivations for ERP(Ross & Vitale, 2001). The
cases also report on serious stabilization issues, for
some organizations it was measured in years, but the
cases render interesting insight into the post-
implementation stages.
The research literature on implementation e.g.
Ross and Vitale(Ross & Vitale, 2001) has little
details on their “transformation stage” and none of
the companies in their study felt that they had yet
transformed themselves. In a workshop for logistics
managers in large Danish enterprises the relationship
between ERP and SCM was emphasized(Sørensen,
2002). The observations were quite similar to those
in a Dutch Delphi study(Akkermans, Bogerd,
Yücesan, & van Wassenhove, 2003). The managers
responsible for the supply chain pointed out that
although the ERP systems were the key to future
supply chain developments the inherent inflexibility
of ERP was also a major roadblock for SCM
The organizations’ general reflection was that
the second-wave projects were oriented towards
process improvements, and therefore the
organizational dimension is emphasized. A second
observation is that the second-wave project took the
organizations places they never intended to go. The
second generation projects were aimed at the supply
chain but the new ES suddenly opened roads that the
organizations initially did not consider. Their new
ERP systems became instrumental in this change.
This suggests a more subtle relationship between
the business, the enterprise systems, and the supply
chain processes, where the enterprise system holds
the potential to leverage (or to destroy) business
opportunities. Consequently, the time is now ripe for
a new management perspective on enterprise
Enterprise systems are under constant development.
Current ERP systems reflect fifty years of
aggregated business requirements and innovations.
Future ES, ERP II or whatever they evolve into, will
continue this evolution. Consequently the
contemporary standard systems from one of the
major vendors will include extended functions for
integration supply chain processes. Based on the
retrospective analysis it is also feasible that future
critical requirements will be provided in the standard
systems and thus will be made available to existing
users as a part of normal upgrades.
Based on the survey data it can be concluded that
large enterprises have the most recent ES from the
major vendors. Also the age profile of the
installations can lead to the conclusion that ES is a
technology that is kept up-to-date with the most
recent release. Then it is feasible to deduce that the
overall ES architecture is determined by the
architects of the major vendors.
The case studies exemplify the impact of ES
architecture on the supply chain. The cases all
illustrate the staged development approach. A few
years after the initial ERP implementation effort,
when the ERP infrastructure is in place, the focus of
the development extends into the supply chain. The
driver of this change is effectiveness in the supply
chain, which is very specific to the organizations,
but information-based collaboration is central to all
the cases.
These arguments suggest that many
organizations are facing transformation triggered by
ES adoption. This transformation is a new kind of IT
diffusion process based on standardized ES and
“best-practice” processes. Until now, mainstream
ERP research has mainly focused on isolated issues
in this transformation. The new diffusion process
goes beyond the traditional system lifecycle
thinking, and the implementation phase is just an
intermezzo in the transformation. What is proposed
here is that the enterprise transformation is
considered in relation to the ERP market and the
evolution of ES.
The implications of the ES transformation for
practice are enormous. If the technology and
processes acquired by the ES impact the supply
chain, managing the transformation is of strategic
importance. This paper therefore proposes a new
area of management, Enterprise Systems
Management and Innovation. Except during
implementation, IT and ERP is not considered top
management issues, and supply chain development
is considered logistics and operations management
responsibility. This paper suggests that SCM and
ERP are to be considered in tandem. Enterprise
Systems Management and Innovation is a new
challenge and an issue that needs to be brought to
the attention of top management.
Another issue is ES as a source of process
innovation. Before acquiring an ERP system, an
organization typically spends a good deal of
resources in evaluating the suitability of the standard
processes of the system and the strategic match.
What happens after a few years? The new releases
are accepted more or less as a routine or based on
operational criteria. Who is responsible for the
strategic evaluation of the new features, and who
initiates a decision to discontinue an ES? This
should be the challenge of the Enterprise Systems
The paper proposed that ES implementation based
on standardized ES and “best-practice” processes
lead to a new management challenge: Enterprise
Systems Management and Innovation. The argument
is rooted in seven case studies, a survey on ERP
adoption and a retrospective analysis on the
development of ES. The paper discussed the
emerging issues and the implications for
Having reviewed the ERP research literature
little support for this new challenge has been found,
and we propose that ES management and innovation
is explored and put on the research agenda.
This paper contributes to ERP research by
exhibiting the importance of ERP management. The
paper draws a direct line from the achieved benefit
in the supply chain, second-wave ERP projects to
ERP implementation and to ES development.
Consequently ERP can be considered a source of
innovation in the supply chain.
The research implies that the ERP industry itself
is to be considered an object for further research.
The ERP industry contributes significantly to the
value chain and to ES transformation of the
ERP research has not dealt explicitly with this
diffusion process. Many authors have dealt with
ERP implementation, a few authors have dealt with
the ERP journey, but no one has considered the ES
transformation process in all entire aspects. Many
enterprises are now organizing their ERP activities
towards second-wave projects. This will present
many new practical challenges as well as research
challenges. In future managers must be prepared to
manage ES – or the large vendors will set the agenda
for them.
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