Technology Adoption Life Cycle and Sustainability in ERP Industry - A Data Envelopment Analysis Approach

The Technology Adoption Life Cycle (TALC) has been used in studying the sustainability of hyper-growth, high-tech markets. Recent work in this area has identified the presence of “chasm” in this lifecycle. Since most technology products ultimately derive their value from software, this study explores the effect of chasm on the sustainability issues in software industry. This paper presents an empirical study of selected ERP companies during the period 1989–2004. We investigate whether these companies experience the stages of TALC and the chasm effect as seen in other high-tech markets. Using financial data, we focus on R&D / Marketing expenses and sales revenue of companies and apply DEA to measure efficiency and investigate the sources and level of inefficiencies in these companies. The results demonstrate that efficient companies are not just investing more in R&D and Marketing, but are in fact managing the inputs better than the inefficient companies.