At the core of most enterprise application software packages are numerous assumptions about how organizational processes should work. The assumptions may match some of the company's needs, but such packaged software is rarely a perfect organizational fit, even with careful configuration. As needs change and the software evolves, the fit gets even looser, which means that managers must strive to improve the enterprise system continuously — the software and the organizational processes it supports — if they hope to achieve and maintain the best fit.
In the May 2002 working paper “Maximizing the Benefits of an Enterprise System,” co-authors Shari Shang, a research fellow in the information systems department at the University of Melbourne (Australia), and associate professor Peter Seddon of the same department, report the results of a three-year study on how four organizations handled enterprise system projects. The authors identify four strategies for achieving fit that reflect an organization's preparedness to change processes, on the one hand, and to customize the software, on the other. (The full paper is available by contacting Seddon at email@example.com.)
Process replication uses the software to duplicate or automate existing business processes. Management feels that existing processes are effective and that the software adequately supports business objectives, or managers may have limited time to explore the new process options the software offers. The company benefits from automation, but old process problems persist.
Process modification and enhancement changes organizational processes to adapt to the software — usually because management believes the software's underlying processes are more effective. Executives may see the enterprise system project as an opportunity to learn a best practice and implement business-process reengineering. The company gets new business processes, but typically at the cost of more operational and change-management problems: data errors, work mistakes and employee resistance.
Software modification and enhancement configures and customizes the enterprise application software to fit existing organizational processes as closely as possible, possibly requiring new program code. The company deems some part of the software insufficient to support business objectives, although it may be committed to using the package as a whole. Although the switch to the new system is relatively painless, subsequent software maintenance and upgrade costs will be much higher.
System exploration reviews all opportunities for better process performance. Companies may tailor some parts of the software to fit important business requirements, but they may also change some organizational processes to exploit attractive software features.