Clayton Christensen was a renowned management theorist and professor at Harvard Business School. He is best known for his work on disruptive innovation and the concept of the “resource-based view” of strategy. In a 2006 article he wrote with Stephen P. Kaufman, Christensen defined organizational “capability” in terms of the resources, processes, and priorities an organization must have to accomplish work (Christensen & Kaufman, 2006). This framework can be applied to understand the capabilities of an organization in implementing an ERP system.
Resources
Resources are the tangible and intangible assets that an organization possesses. Tangible resources can include physical assets like buildings, equipment, and financial capital. Intangible resources include intellectual property, brand reputation, organizational culture, and knowledge. These resources provide the foundation for an organization’s capabilities and enable it to carry out its activities effectively.
- Financial resources available for the implementation,
- ERP software,
- People with the right know-how to implement, use, and support the system,
- Time required to implement the system, including the time required for the implementation and the time an organization’s people have set aside for the implementation.
Processes
The set of activities, methods, and systems an organization uses to transform inputs (such as resources) into desired outputs (such as products or services). Processes include both formal and informal procedures, workflows, and routines that govern how work is done within an organization. Efficient and effective processes are critical for achieving desired outcomes and competitive advantage.
- Processes used to run every aspect of the business and the maturity of those processes,
- Processes used to implement the system, including the methodology required to lead and manage the eight things critical to the success of an implementation:
- Value,
- Capability,
- Functionality,
- Data,
- Technology,
- Change Leadership,
- Quality,
- Governance.
Priorities
Priorities result from the business model of an organization. Large and small decisions are made at every level of the organization. How funding and other resources are applied are the result of organizational priorities. An ERP implementation will require that it is prioritized at the highest levels of an organization and that prioritization needs to be shared at every level.
Extending Your Capabilities
Organizations can extend their capability with outside assistance, but the capabilities needed will vary by organization. For most organizations, implementation costs will exceed the cost of the software. To avoid undo expense, it is important to understand what outside assistance is required, and, in the long term, how those capabilities can eventually be transferred to the organization.
Reference: Christensen, C. M., & Kaufman, S. P. (2006). Assessing your organization’s capabilities: Resources, processes and priorities.