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Putting the enterprise into the enterprise system.

T H Davenport1

  • 1Boston University School of Management, MA, USA.

Harvard Business Review
|June 6, 1998
PubMed
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.

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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.

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