Enabling Digital Options via ERP Implementation: A Theoretical and Empirical Analysis

by Jahangir Karimi, Toni M. Somers, Anol Bhattacherjee

Recently, many firms are transforming themselves from vertically integrated organizations into digitally enabled organizations. As firms become more innovative in their technical infrastructures and more competitive in respective industries / verticals, their extended enterprise models include using their previous enterprise resource planning (ERP) investments as foundations for prioritizing additions and for longer-term strategies. The key issue for many firms is how to leverage their ERP implementation to become better partners and collaborators by enabling digital options to exploit business opportunities. This paper examines under what contextual conditions ERP system implementation have the greatest impact on digital options adoption intentions. Using empirical data, this study finds that the impact of the extent of ERP implementation on digital options adoption intentions is moderated by a firm's digital resource readiness. For information systems (IS) practice, this study suggests that firms should view ERP divisibility as option value generator for supporting new customers and revenue opportunities.

72 pages, Paperback

Published July 15, 2010