ERP and Organizational Misfits: An ERP Customization Journey

Abstract

Enterprise resource planning (ERP) projects are complex and resource demanding. Some ERP projects fail due to what is called ‘misfit’ between the adopting organization's business requirements and the ERP's functionalities. Existing literature has studied how ERP systems match to different organizations and have argued that there always exists a gap between the business rules embedded in the system, and the practices and processes that exist in organizations. Thus, tailoring might be an important procedure during ERP implementations, in which the ERP customization takes place in order to ensure the compliance with the organizations’ critical business processes and requirements.Via an in-depth case study, this research investigates how the different ERP tailoring types defined in literature correspond to different types of misfits identified in an ERP implementation project at a large public organization. The study results suggest that there is a correlation between tailoring types and categories of misfits. In other words, different categories of misfits can be decisive for the type of customization being used. These categories can be organized into four main influences that affect tailoring; strategy, project, system and institution. Moreover, internal institutional factors that are linked to system acceptance, such as culture and resistance could affect tailoring.