Aligning ERP implementation with competitive priorities of manufacturing firms: An exploratory study

Companies worldwide have made substantial investments in installing enterprise resource planning (ERP) systems. In the meantime, implementing ERP systems has proven unexpectedly difficult, and the final benefits have been uncertain. Several researchers have concluded that the failures are usually the result of business problems instead of technical difficulties. ERP systems affect a firm's strategy, organization, and culture. Past research has recognized the need for planning an ERP implementation at the strategic level but offers no specific guidelines. Using the case study method that involves direct observation and systematic interviews at five US and Taiwanese manufacturing firms, this study investigates the relationship between ERP implementation practices and a firm's competitive strategy. The results confirm our research proposition, that ERP implementation should be aligned with competitive strategy. Specific guidelines are suggested for making the alignment. In addition, we identified two other variables, national culture and government/corporate policies, as being critical to ERP implementation in multi-national settings. Managerial implications of the findings and future research issues are discussed. (C) 2004 Elsevier B.V. All rights reserved.