Are ERP Systems a Source of Competitive Advantage?

  • Seddon P
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Abstract

Packaged enterprise application software vendors claim that ERP systems are a source of competitive advantage. On the other hand, Nicholas Carr says that IT has become a commodity, and therefore that investments in IT, including ERP, are unlikely to be sources of competitive advantage. This paper asks who is right. Evidence from three surveys and a single case study suggests that ERP systems provide benefits such as improved information visibility, personnel and inventory reduction, productivity improvement and new improved processes. However, since ERP software has been available for many years, and benefits such as those listed have been realized by many firms, it is argued that ERP software is an unlikely source of competitive advantage either through opportunities for strategic positioning or through gains in operational effectiveness.

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Authors

  • P B Seddon

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