Exploring the links between competitive advantage and enterprise resource planning (ERP) upgrade decision: A case study approach

Abstract

The complexities in making an ERP upgrade decision have been widely cited in the trade press. To the client-organizations, the issues of maintenance and upgrade are continuously existing and requiring extensive attentions and efforts as far as continuous business improvement and benefit-realization are concerned. However, there is very few studies dedicated to provide better understanding of how a firm considers an ERP upgrade decision. Competitive advantage has often been cited and associated with upgrade decision. To what degree and how an ERP upgrade is perceived as providing competitive advantage to a firm? In order to gain in-depth understanding of whether competitive advantage affects upgrade decision and how, an evaluative case study is conducted in a firm that is making an ERP upgrade decision. We find that out of the four characteristics of competitive advantage proposed in the resource view theory, value is perceived as the foremost important, and other characteristics as unimportant. With this, we suggest that the type of competitive advantage perceived and expected from an ERP upgrade is non-sustainable (in the long-run) cost leadership-oriented advantage. However, this finding is likely constrained by how the ERP is used and the scope of its implementation by this case. © Springer-Verlag London Limited 2009.