Vol 25, No 3; Article by Ravi Seethamraju and Diatha Krishna Sundar; September 2013
Enterprise resource planning (ERP) systems flexibly support many changes that take place during the business growth or market downturn of a firm. While ERP systems are considered a key component of the current IT infrastructure and have delivered cost efficiencies, control, and consistent execution in several organisations, their rolein enabling agility and innovation is ambiguous. In order to position themselves better to respond to market dynamics and changing business conditions, firms must have agility - the ability to adapt by quickly changing and reconfiguring the necessary business processes. With limited research available on ERP post-implementation effects in general, and on agility and innovation in particular, this study employs a cross-sectional field study and analyses how the key defining features of the enterprise systems environment - integration, process optimisation, and best practices affect firm agility in general and business process agility in particular.
According to the study, integration and standardisation, the key characteristics of the ERP-enabled environment, have mixed and varying effects on business process agility, which is dependent upon the extent and type of standardisation and integration implemented in the organisation. Integration across hierarchical levels has helped processes become more agile through improved visibility and decision making, while integration of processes and information across functional boundaries has contributed to improvements in the speed of execution and ability to reconfigure process components. Tight coupling of systems, structures, and processes resulting from ERP implementation restricts a firm's ability to reconfigure and deploy business processes. The study suggests that it is not necessary for all processes to be agile, and emphasises the importance of business process management capability of an organisation and best practice in building and improving process agility. Rather than the ERP-system enabled environment it is the inadequacies in implementation and poor process optimisation prior to ERP implementation that are restricting process agility.
