Is Implementing ERP Like Pouring Concrete Into a Company? Impact of Enterprise Systems on Organizational Agility

Abstract

Literature is divided on whether enterprise systems promote or hinder organizational agility. To the best of our knowledge, this paradox has never been rigorously theoretically analyzed nor empirically investigated. This paper seeks to address this paradox by leveraging upon innovation assimilation literature and knowledge based and capabilities based views of organizations. We propose a theoretical framework of the effects of ERP assimilation on agility. We also theorize that the dynamic capability of systems agility not only has a direct effect on organizational agility, but also moderates the effect of ERP assimilation levels on agility. We validate the proposed framework by conducting a cross-sectional survey across 215 organizations. The results shed light on one part of the dilemma: higher ERP assimilation levels positively influence organizational agility and validate the proposed model. Moreover, systems agility acts as a critical enabler by amplifying the net positive impact of ERP assimilation on organization agility- in addition to having a strong direct effect.

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