Influence of Enterprise Systems on Business Process Agility (Track 1, Session 3)
Author(s) :
Ravi Seethamraju (The University of Sydney, Australia)
Abstract : In the past quality, cost efficiency, quality and speed, the traditional measures of performance, were sufficient to achieve profitability and maintain a competitive edge. In today�s market place, firms must be able to change business processes rapidly and efficiently in line with the changing business conditions and customer needs. Thus, agility, a combination of speed and flexibility, without compromising on the quality and cost efficiencies is now considered important to facilitate improvement in the company�s ability to exploit opportunities for innovation and competitive performance. Information technology enabled innovations in general and enterprise resource planning systems in particular, have contributed in the past to the simplification, standardization and automation of business processes. Even though recent process improvement initiatives and information/process integration facilitated by the implementation of enterprise systems in firms have positively influenced the firm�s customer focus, it is not clear how they have contributed to the agility of the processes. In fact, building some level of process agility may go against the espoused benefits of maintaining standardized best practice business processes embedded in the ERP software solutions. Even though it is argued that they can facilitate changes in the speed and variety of product and process offerings by firms, thereby enabling flexible delivery, it is not clear how the rigid standardization of the processes would allow them to become agile. This study, based on literature review and past research, has developed a research framework and several propositions that will investigate the influence of typical characteristics of ERP systems such as standardization of processes, integration of internal processes and information integration, real-time visibility of information, best practices embedded in the software processes and automated transactions on process agility. The paper first reviews the literature on the concept of �agility� in general and in operations management and information systems context in particular and discusses the significance of process agility for modern business organizations. It argues that the standardization of business processes and their procedural steps, the best practices embedded in the ERP system software solutions, and the automation of business transactions consequent to the implementation of enterprise system may actually limit the agility of business processes. Integration of business processes and information,, and real-time visibility of information across the enterprise, consequent to the implementation of ERP systems, however, may enhance the agility of processes. The decentralisation of controls, and the requirement of new skills and the inherent process characteristics such as time-criticality, variability, complexity and uncertainty, may however, limit the level of agility achievable in ERP environment. Developing and implementing agile business processes is difficult and the level and scope of process agility achievable is dependent upon organizational (size, process complexity, integrated processes, skills, info systems integration, data integration) environmental (external competition, industry type/nature), technological (IT capabilities) and process (process management capability, characteristics of processes) factors. Keeping in mind these limitations, the following generic propositions are hypothesized. The formalized and possibly outdated business processes that are embedded in existing systems and the difficulties of achieving cross-functional consensus for cross-functional systems and fit between business processes and related information systems/technologies are some of the challenges organizations may face in the future. New research in this area is essential to prepare businesses for the next stage of business revolution that is going to be dominated by business processes, their management and the way the information systems support knowledge intensive work.

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