Simon Woodworth
Business Information Systems, UCC
Introduction
 Desire to gain competitive advantage is a motivator for
implementing Enterprise Systems (ES)
 But the nature and extent of the contribution of ES to
competitive advantage is unclear
 Using Dynamic Capabilities Theory (DCT) and
Diffusion Of Innovation Theory (DOI), we can build a
framework for examining the interplay between ES
and Core Capabilities
 Framework can then be used to guide field research
using Case Study methodology.
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Core Capability
Enterprise System
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Enterprise Systems
 An ES is a package of configurable and customisable modules,
embodying best practices, that integrates data, processes, resources
and functions across one or more organisations and provides central
planning and control of those data, processes, resources and functions.
Core Capabilities
 A construct of the Resource Based View (RBV) and
Dynamic Capabilities Theory (DCT).
 RBV states that capabilities that are Valuable, Rare and
Inimitable confer a sustained competitive advantage
on an organisation, as long as it is organised to exploit
them.
Resources and Capabilities
•
Enabling Capabilities keep you in
the game.
•
Supplemental Capabilities confer
competitive advantage but that may
easily be eroded by competitors.
•
Core Capabilities confer
competitive advantage but are very
hard (or expensive) to imitate or
substitute and so any competitive
advantage is likely to be sustained.
Core Capabilities
Core Capabilities and ES
 Ideally, an Enterprise system would enhance Core
Capabilities
 Why?
 Resultant Sustained Competitive Advantage would
confer the best opportunity to gain a decent return on
the investment
 Diffusion Of Innovation theory provides a suitable
basis for examining how the implementation (or the
diffusion) of an ES influences CC
Diffusion
of
Innovation
The Research Topic
 The interactions between Enterprise Systems and Core
Capabilities
Research Questions & Hypothesis
RQ1 What are the Core Capabilities of the organisation?
RQ2 What activities are observed during the Enterprise
System implementation?
RQ3 What are the interactions between the Core
Capabilities and the Enterprise System?
H1
The process of Enterprise System implementation
determines future Competitive Advantage.
Looking for the answers
 RQ1 – Core Capabilities
 Look for tacit processes (difficult), the history of the
organisation, asset positions that are protected by patent or
which would be extremely expensive to imitate or substitute.
 RQ2 – The Implementation Activities
 For example process re-engineering, imposition of control
mechanisms, replacement of legacy systems, integration and
learning activities, configuration and customisation of new
ES.
 RQ3 – The Interactions between ES and CC
 Examine changes to processes, asset positions and
technological opportunities (ability to adapt in future). Do
the activities examined in RQ2 change the core capabilities
identified in RQ1?
Looking for the answers
 H1
 The independent variable

The ES implementation process, as determined by RQ2
 The dependent variable

Future competitive advantage, surrogated by changes to Core
Capabilities, as determined by RQ1 and RQ3
 Note: How is a Core Capability “enhanced?”
 Look at changes to value, rarity, inimitability and
organisation’s ability to exploit.
Research
Question
Coverage
RQ1
RQ2, RQ3
H1
H1
Research Strategy
 Case Study approach
 Two cases required
 Select cases along dimension of degree of adaptation
of deployed ES (Out-of-box versus high degree of
customisation)
Case 1:
• Lots of experimentation
• Tweaking the system
• Possibly significant
customisation costs
• Close fit between ES and
CC
• Enhancement of CC
Case 2:
• No changes beyond
original implementation
• Could still be customised
but costs might be lower
as less is likely to be done
• Potential misfit between
ES and CC
• No enhancement of CC
Analysis
 Within – case analysis to answer RQ1, RQ2, RQ3 with
very concrete view of Core Capabilities
 Cross – case analysis to develop a more abstract view of
the Core Capabilities concerned and to test H1.
Results
 Concrete view of Core Capabilities that addresses
accusations of tautology, empirical impracticality and
vagueness.
 We can draw some conclusions about the influence of
Enterprise systems and their implementation on Core
Capabilities and thus Competitive advantage
 This may have implications for ES Implementation
practice
A simple model
Informs
Core Capability
Enterprise System
Reinforces