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The development, implementation, operation, support, maintenance, and upgrade of enterprise systems (ES) have given rise to a multibillion dollar industry. Nonetheless, this industry has been perceived as having difficulties in achieving an adequate return on investment. We believe that a major reason why organizations encounter problems is that they fail to understand properly how well an ES package aligns with or fits their needs. Misfits are external manifestations of the differences between two worlds: that of the organization’s needs on the one hand and the system’s capabilities on the other. To address issues of fit in ES package implementation, we need a way to describe and evaluate fit. To achieve this end, we use the concept of ontological distance. Specifically, we provide an approach to evaluate the significance (size) of a gap between the world of organizational requirements and the world of system capabilities. The greater the distance between the organizational world and system world, the more likely we believe that organizations will encounter difficulties in their engagement with an ES package. Distances arising from the joint evolution of organizational requirements and system capabilities occur at a number of stages during the process of implementing an ES. From a theoretical perspective, our conceptual development shows how measures of ontological distance can be used to predict the likely deficiencies an organization will have on implementing an enterprise system. From a practical perspective, our research helps organizations to avoid problems when implementing an enterprise system and to select the best package for the organization’s needs.
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