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ERP Competence-Building Mechanisms: An Exploratory Investigation of Configurations of ERP Adopters in the European and U.S. Manufacturing Sectors

Department of Management Science and Operations, London Business School, London NW1 4SA, United Kingdom
Technology and Operations Management Department, INSEAD, 77305 Fontainebleau, France
amasini{at}london.edu
luk.van-wassenhove{at}insead.edu

This paper contributes to the literature on enterprise resource planning (ERP) by pursuing two objectives. First, it identifies configurations of ERP adopters that have similar needs and develop similar competencies. Second, it tests the hypothesis that, to maximize benefits from their ERP projects, organizations should align their ERP competence-building mechanisms with the ERP needs that arise from their operational environment. The analysis of a sample of manufacturing companies that implemented ERP between 1995 and 2001 uncovers four distinct configurations representing different degrees of fit between needs and competence-building mechanisms: the frugal ERP, the extensive business process reengineering (BPR), the adaptive ERP, and the straitjacket. The results support our hypothesis and suggest that the consequences of a misfit between needs and competence-building mechanisms are more severe for companies that operate in complex and dynamic environments and have informal organizational structures than for firms with rigid structures that operate in simple and stable environments.

Key Words: enterprise resource planning (ERP); operations strategy; information and communication technology; empirical research; cluster analysis
History: Received: May 3, 2005; accepted: January 29, 2008.