What Happens After ERP Implementation: Understanding the Impact of Inter Dependence and Differentiation on Plant-Level Outcomes1

We present a model of the organizational impacts of enterprise resource planning (ERP) systems once the system has gone live and the “shake-out” phase has occurred. Organizational information processing theory states that performance is influenced by the level of fit between information processing mechanisms and organizational context. Two important elements of this context are interdependence and differentiation among subunits of the organization. Because ERP systems include data and process integration, the theory suggests that ERP will be a relatively better fit when interdependence is high and differentiation is low. Our model focuses at the subunit level of the organization (business function or location,…