One Size Fits All? How Does Firm Heterogeneity Affect ERP Adaptation and Firm Performance? ()
ABSTRACT
A cause of high ERP failure rate is the misfit between organization
processes and ERP systems. To solve the misfit problem, literature suggests two
adaptation approaches: conducting business process reengineering (BPR) to fit
organization processes into ERP systems, or customizing ERP systems to fit
organizational processes. However, extant studies seldom explore how firms
should choose between the two adaptation approaches and adjustment level based
on their heterogeneous firm characteristics. Through the lens of contingency
based task-technology-fit (TTF) theory, this study collects data from 150 U.S.
manufacturing firms that use ERP systems, and empirically investigates how
firms could choose a suitable adaptation approach between BPR and system
customization while considering their heterogeneous characteristics, such as
firm size, industry, top management involvement, big-bang or phase-in
implementation speed. Consequently, this study further examines how such choice
of different adaptation strategies and adaptation level affect firms’ final
firm performance. Our results show that industry, top management involvement,
and implementation speed significantly affect firms’ choice of adaptation
approaches and adaptation level, while their choices also significantly affect
final firm performance.
Share and Cite:
Hsu, P. (2020) One Size Fits All? How Does Firm Heterogeneity Affect ERP Adaptation and Firm Performance?.
Open Journal of Business and Management,
8, 2597-2622. doi:
10.4236/ojbm.2020.86161.
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