| The emerging trend of adopting commercial IT application packages, such as enterprise systems (ES), presents a challenge to traditional strategic IT research because it departs from previous analytical assumptions with regards to technological and process heterogeneity. This research examines the strategic impact of ES from the dynamic capability perspective. Dynamic capabilities are the set of organizational routines and management processes by which firms integrate, coordinate, reconfigure, and transform internal resources to achieve congruence with business requirements. While strategically important, dynamic capabilities are necessary but not sufficient to create competitive advantage.; From the dynamic capability perspective, ES by itself does not create business value. Competitive advantage thus lies in creative ES deployment and utilization to achieve congruence with business requirements. Taking this view as a basis, this research assesses the capabilities dimension of ES in terms of technology and business process. Three fundamental dimensions of ES capabilities are proposed: IT infrastructure capability, business process reengineering, and knowledge management. IS management capability, comprising strategic alignment, organizational learning and competence building, and organizational transformation, is further identified as a higher-order mechanism guiding the evolution of ES capabilities. If appropriately applied, ES management is expected to moderate the outcome of all other ES capabilities.; This research employs both qualitative and quantitative research methods to examine the strategic impact of ES capabilities on ES outcomes. The quantitative analysis suggests a positive relationship between three dimensions of ES capabilities and ES outcome. However, the moderating effects of IS management on the three dimensions of ES capabilities are not significantly supported. In order to develop a further understanding of the strategic role of is management capability, we then examine the role of IS management by conducting seven interviews. Our qualitative data provides ample evidence to capture the strategic implications of IS management capability for ES deployment and utilization.; This research is important: practically, the research findings enhance our understanding of the strategic implications of ES deployment and utilization; theoretically, such an approach advances the resource-based paradigm to the extent that it contributes to and operationalizes the theory. |
