Failures in large-scale information technology implementation are abundantly documented in the practitioner literature. In this study, we examine why some firms benefit more from enterprise resource planning (ERP) implementation than others. We look at ERP implementation from a technological diffusion perspective, and investigate under what contextual conditions the extent of ERP implementation has the greatest effect on business process outcomes. Using empirical data, we find that the extent of ERP implementation influences business process outcomes, and both ERP Downloaded by [University of Exeter] at 05:20 06 August 2015 102 KARIMI, SOMERS, AND BHATTACHERJEE radicalness and delivery system play moderating roles. For information systems (IS) practice, this study helps managers direct their attention to the most promising factors, provides insights into how to manage their complex interactions, and elaborates on their differential effects on business process outcomes. For IS research, it integrates innovation diffusion theory into our current knowledge of ERP implementation and provides theoretical explanations for ERP implementation failures.KEY WORDS AND PHRASES: business process outcomes, enterprise systems, ERP effects, ERP implementation, ERP radicalness, information technology innovation, innovation diffusion theory., a considerable number of firms have not been able to derive full benefits from their IT investments, largely due to their inability to effectively deploy IT in their value-chain activities and business strategies [3, 10, 23]. IT implementation is important because it enables a firm's competitive strategies by lowering production costs, achieving operational flexibility, enhancing supplier or customer linkages, and enhancing or creating new products and services [70]. While some implementations of enterprise resource planning (ERP) systems have led to significant reduction in inventory and in administrative costs, and millions of dollars in logistics savings at firms such as Dow Corning, IBM, and Texas Instruments [47,75,82], others have led to failures at firms such as AMR Corporation, Dow Chemical, Hershey Foods, Fidelity Brokerage Services, and FoxMeyer [82]. Such conflicting results have prompted an empirical examination of the factors that lead to differential outcomes across firms.Most factor-based studies explain the role of one or more organizational (e.g., delivery system), technological (e.g., divisibility, radicalness), user, task, or environmental factors that affect adoption, implementation, or outcomes of innovations [23,37,38,43,84]. Researchers have suggested that (1) organizational and technological factors are most important, difficult to manage and control, and more beneficial to the organization than the other factors [33,54,61,84], and (2) depending on the specific technology in question, organizational factors vary and should be measured as a combined technology-organization factor [37]. Further, a recent review of the technology strategy literature in Fichman [37] identi...