Enterprise-Level Packaged Software Adaptation: An Empirical Study of Firm-Initiated and Vendor-Initiated Strategies

This paper empirically investigates the relationship between two IT adaptation strategies: firm-initiated and vendor-initiated adaptation, and managerially reported levels of satisfaction with information technology performance. It does so in the context of 60 implementations of Customer Relationship Management information technology. Firm-initiated adaptations originate with the implementing firm during the implementation process. Two types of firminitiated IT adaptation are investigated: database modification, and software functionality modification. Vendor-initiated adaptations originate with the producer of the software package: the software vendor. These adaptations frequently take the form of versions of the software package that are designed to address the specific needs of particular industries. This paper also investigates whether firms’ use of vendor-adapted software versions is related to lower levels of firm-initiated adaptation. Findings suggest that database modification, when used in moderation, leads to improvements in satisfaction. However, excessive database modification can reduce satisfaction, leaving the firm no better off than if it had minimized this kind of adaptation in the first place. No evidence is found to support the notion that software functionality modification yields improvements for the measured outcome. Findings also support the assertion that the use of vendor-adapted software versions leads to increased satisfaction. In contrast, however, companies that use these vendor-adapted software versions do not demonstrate lower magnitudes of firm-initiated adaptation. Taken together, the findings suggest a contingent view of IT adaptation strategies. Adaptation type and magnitude interact to differentially influence satisfaction. Managers can use these findings to better evaluate when and how to use IT adaptation strategies. Researchers can build on these findings to further improve an understanding of how and in what circumstances IT adaptation influences performance.