Despite near saturation of enterprise resource planning (ERP) implementations in both Fortune 500 and medium-to-large organizations, little is known about issues related to ERP in the phase subsequent to implementation and stabilization, hereafter referred to as post-implementation. This research proposes that exploiting the significant investment in ERP requires developing organizational capabilities to enhance fit between system functionality and business needs. Achieving this capability is predicated on effectively leveraging multiple knowledge sources from throughout the organization. Using the knowledge-based view of the firm as a theoretical lens, this research suggests that post-implementation customizations are the result of integrating specialized knowledge held by ERP-technical and functional business subject matter experts, and that achieving fit between the ERP and the functional business units that utilize the system represents an organizational capability.
Survey data from 69 organizations that have implemented SAP and are in the post-implementation phase of the ERP lifecycle are examined to determine the effects of specialized common knowledge, liaison mechanisms and work unit structure on ERP post-implementation customizations, and the resulting effects of customizations on ERP – business fit. Results indicate that specialized common knowledge and liaison mechanism play a more pronounced role in ERP post-implementation customizations than do work unit structure, and that customizations aimed at achieving operational and strategic improvements have greater impacts on ERP – business fit than do those aimed at managerial or IT infrastructure improvements.
The findings suggest that common knowledge and liaison mechanisms are more critical to knowledge integration than are structural arrangements, and that knowledge integration is more important for organizational capabilities aimed at achieving change and innovation, rather than compliance and control. For practitioners, the findings suggest that creating an environment where ERP-technical and functional business resources can communicate increases the scope and magnitude of ERP post-implementation customizations that have the greatest impact on achieving ERP – business fit. Moreover, given limited resources, managers should focus on those ERP post-implementation customizations that are aimed at achieving operational and strategic improvements, as these customizations have the greatest impact on ERP – business fit.
