Related Experiment Videos
Putting the enterprise into the enterprise system
1Boston University School of Management, MA, USA.
Harvard Business Review
|June 6, 1998
Summary
Enterprise systems (ES) offer efficiency gains but pose significant risks. Successful implementation requires general managers to balance system demands with business needs, avoiding costly failures.
Area of Science:
- Information Systems
- Business Management
- Corporate Computing
Background:
- Enterprise systems (ES) integrate disparate information systems into a single platform.
- Vendors like SAP offer ES solutions promising increased efficiency and profitability.
- Rapid adoption of ES is driven by potential gains, despite significant implementation challenges.
Purpose of the Study:
- To analyze the advantages and disadvantages of implementing enterprise systems.
- To highlight the potential for unintended and disruptive consequences of ES adoption.
- To emphasize the critical role of general management in mediating ES integration.
Main Methods:
- Case study analysis of both successful and unsuccessful enterprise system implementations.
- Examination of the impact of off-the-shelf ES solutions on corporate strategy and culture.
- Discussion of risks including high costs, implementation difficulties, and loss of managerial control.
Main Results:
- Enterprise systems can impose their own logic, forcing significant changes in business operations.
- Failed ES implementations, like the FoxMeyer Drug bankruptcy case, demonstrate severe risks.
- ES adoption requires careful consideration of profound business implications beyond technological aspects.
Conclusions:
- Enterprise systems present substantial rewards but also carry equally great risks.
- Managers must be aware of the potential for disruptive consequences and implementation failures.
- Responsibility for ES adoption should not be solely delegated to technologists; general managers are essential.