Enterprise System as an Orchestrator of Dynamic Capability Development: A Case Study of the IRAS and TechCo

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Abstract:

Corporations are perpetually hunting for ways to develop exclusive, sustainable, and competitive advantages that will enable them to leapfrog ahead of their industrial adversaries. Notably, the debut of enterprise systems (ES) during the recent decade has given rise to frequent talk of the utilization of integrative, IT-inspired business mechanisms to achieve the much sought-after but elusive competitive edge. Others, however, have argued that the search for sustainable competitiveness should instead be anchored in organizational efforts to cultivate and build up firm-specific dynamic capabilities. Cognizant of the various perspectives, this paper takes a holistic approach in proposing the achievement of sustainable competitive advantages by examining the manner in which ES adoption can contribute to the forging of dynamic capabilities. In particular, Montealegre’s (2002) process model of capability development is adopted as the analytical framework to explore the strategization of ES development in two different organizations, with the main distinction being that one of them subscribes to commercially available SAP applications while the other chooses to develop its ES in-house. Through comparing and contrasting evidence from both cases, this study attempts to decipher how ES adoption can be strategized to develop strategic capabilities and understand the implications between off-the-shelf and bespoke ES in affecting the process of dynamic capability development.

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