A Longitudinal Examination of Enterprise Resource Planning System Post-Implementation Enhancements

ABSTRACT:  Past information systems research on real options suggests that large-scale information technology projects, such as enterprise resource planning systems (ERPS), create various future options for system reconfiguration and extension. Management would decide whether to exercise an option according to future conditions. From the real options lens, we conduct a longitudinal examination of the determinants of post-implementation enhancement decisions for firms that have previously reported ERPS adoptions. We find that proactive ERPS adopters that employ performance-enhancing post-implementation review (PIR) practices and obtain favorable performance outcomes are more likely to make system enhancements. Evidence also shows that management likely makes joint decisions on PIR uses and ERPS enhancements, consistent with the view that managers perform gateway reviews at points where potential enhancement opportunities are present. Moreover, management tends to delay the enhancing decision until after th...

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