Simon WoodworthBusiness Information Systems, UCC

IntroductionDesire to gain competitive advantage is a

motivator for implementing Enterprise Systems (ES)

But the nature and extent of the contribution of ES to competitive advantage is unclear

Using Dynamic Capabilities Theory (DCT) and Diffusion Of Innovation Theory (DOI), we can build a framework for examining the interplay between ES and Core Capabilities

Framework can then be used to guide field research using Case Study methodology.

Core CapabilityEnterprise

System

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Enterprise SystemsAn ES is a package of configurable and customisable

modules, embodying best practices, that integrates data, processes, resources and functions across one or more organisations and provides central planning and control of those data, processes, resources and functions.

Core CapabilitiesA construct of the Resource Based View

(RBV) and Dynamic Capabilities Theory (DCT).

RBV states that capabilities that are Valuable, Rare and Inimitable confer a sustained competitive advantage on an organisation, as long as it is organised to exploit them.

Resources and Capabilities• Enabling Capabilities keep

you in the game.

• Supplemental Capabilities confer competitive advantage but that may easily be eroded by competitors.

• Core Capabilities confer competitive advantage but are very hard (or expensive) to imitate or substitute and so any competitive advantage is likely to be sustained.

Core Capabilities

Core Capabilities and ESIdeally, an Enterprise system would enhance

Core CapabilitiesWhy?Resultant Sustained Competitive Advantage

would confer the best opportunity to gain a decent return on the investment

Diffusion Of Innovation theory provides a suitable basis for examining how the implementation (or the diffusion) of an ES influences CC

DiffusionofInnovation

The Research Topic

The interactions between Enterprise Systems and Core Capabilities

Research Questions & HypothesisRQ1 What are the Core Capabilities of the

organisation?RQ2 What activities are observed during the

Enterprise System implementation?RQ3 What are the interactions between the

Core Capabilities and the Enterprise System?

H1 The process of Enterprise System implementationdetermines future Competitive Advantage.

Looking for the answersRQ1 – Core Capabilities

Look for tacit processes (difficult), the history of the organisation, asset positions that are protected by patent or which would be extremely expensive to imitate or substitute.

RQ2 – The Implementation ActivitiesFor example process re-engineering, imposition of

control mechanisms, replacement of legacy systems, integration and learning activities, configuration and customisation of new ES.

RQ3 – The Interactions between ES and CCExamine changes to processes, asset positions and

technological opportunities (ability to adapt in future). Do the activities examined in RQ2 change the core capabilities identified in RQ1?

Looking for the answersH1

The independent variable The ES implementation process, as determined by

RQ2The dependent variable

Future competitive advantage, surrogated by changes to Core Capabilities, as determined by RQ1 and RQ3

Note: How is a Core Capability “enhanced?”Look at changes to value, rarity, inimitability

and organisation’s ability to exploit.

ResearchQuestionCoverage

RQ2, RQ3

RQ1

H1

H1

Research StrategyCase Study approach

Two cases required

Select cases along dimension of degree of adaptation of deployed ES (Out-of-box versus high degree of customisation)

Case 1:

• Lots of experimentation

• Tweaking the system• Possibly significant

customisation costs• Close fit between ES

and CC• Enhancement of CC

Case 2:• No changes beyond

original implementation

• Could still be customised but costs might be lower as less is likely to be done

• Potential misfit between ES and CC

• No enhancement of CC

AnalysisWithin – case analysis to answer RQ1, RQ2,

RQ3 with very concrete view of Core Capabilities

Cross – case analysis to develop a more abstract view of the Core Capabilities concerned and to test H1.

ResultsConcrete view of Core Capabilities that

addresses accusations of tautology, empirical impracticality and vagueness.

We can draw some conclusions about the influence of Enterprise systems and their implementation on Core Capabilities and thus Competitive advantageThis may have implications for ES

Implementation practice

A simple model

Core CapabilityEnterprise

System

Reinforces

Informs