Article Summary

Liang, H., et al. Assimilation of Enterprise Systems: The Effect of Institutional Pressures and the Mediating Role of Top Management. MIS Quarterly. Vol. 31 No. 1, pp. 59-87/ March 2007.

In the article from MIS Quarterly, the authors discussed how they developed a theoretical model that involved investigating how the top management of companies involved in implementation of enterprise resource planning (ERP) systems were able to interfere with external pressures which impact how much new ERP systems are actually used. These external pressures included pressure from suppliers, customers, competitors, professional networks and governmental agencies. The top management was said to be the "organization's primary human interface" when it comes to the external environment. The authors tested their hypothesis by obtaining survey data from different companies that had already implemented new ERP systems and then used a parital least squares analysis to determine how managers at those companies handled external pressures. The results of the study indicate that institutional forces strongly influenced the assimilation and use of ERP systems. The study concludes that it is important for top managers to facilitate ERP assimilation by giving into institutional pressures so that all features of ERP systems are integrated within the firms business processes.

The article relates back to what was discussed in chapter 3 regarding the interdependence of the business environment, the organization's culture, the business processes, business strategy and developing information systems like ERP systems. I think the opening case of that chapter on US Airways attempt to merge information systems and get rid of redundant systems ties back into the purpose of the article which is to illustrate that once the implementation phase is complete there is still much that needs to be done to ensure that a new information system improves the value of the firm. U.S. Airways was able to lower costs by consolidating information systems but will it be able to capitalize on those costs by winning the market share? It still faces external pressures from customers and competitors. If the new information system does not work for customers they will take their business elsewhere. Competitors with information systems already in place for some time have the advantage of experience while U.S. Airways is still adjusting to its new system.

My own experiences also relate back to what was discussed in the article. My company recently implemented a new ERP system and it took a very long time for everyone in the company to adjust and for productivity to get back to normal levels even after everyone was trained. Many people were hesitant to adapt to the new system, customers complained because orders were late or lost in the system, suppliers also had issues with getting raw materials into the new system and finally when the company was audited for ISO certification there was pressure from outside agencies to change the system to meet ISO standards. All of these pressures forced the workforce to use the ERP system and allowed it to be more fully integrated into everyday business. Management helped mediate this process by making changes in policy and procedures that allowed the external pressures to be alleviated.