Enterprise Resource Planning (ERP) systems present significant challenges to modern businesses. Although some organizations enjoy a smooth ERP implementation, others experience very public failures. The present research develops a general models that uses differences between appropriability regimes to predict which adoption strategies will lead to successful implementation. In strong appropriability regimes, intellectual property protection (e.g. patents) helps firms secure the benefits of technological innovation. However, ERP software is usually purchased rather than developed, so it is subject to the minimal intellectual property protection typical of a weak appropriateness regime. It is the latter, weak appropriation context that is the recently adopted Enterprise Resource Planning (ERP) systems was used to test a model of weak appropriation with significan results. Leadership (social learning theory), business process reengineering (change the company not the technology) and acquisition strategy (buy, don't make) were found to be significant predictors of adoption performance (final model R-square=43%, F=5.5, p<.001, df=7,52). Industry (manufacturing versus service) and scale (sales) were included as control variables but were not significant in the analysis. EDI (electronic data interchange usage), and project start date were also used as control variables and were found to have significant regression coefficients. That is, EDI tends to substitute for, and slow adoption of ERP, and early movers finish implementation sooner than competitors. In general, strong, honds-on leadership, and business process reengineering coupled with purchasing ERP systems were found to be a much more effective adaptation strategy than tailoring enterprise software. The implications of these results are discussed.
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Academy of Management Meeting-August, 2003
RIT – Main Campus