ERP and Innovation in Schupeterian Market Dynamics

Organizations are under competitive pressure to innovate and at the same time efficiently execute their strategy, and have been implementing enterprise resource planning (ERP) solutions to aid in the achievement of their goals. Sambamurthy, Bharadwaj, and Grover (2003) describe the capability of simultaneous innovation and efficient execution as agility, and they propose a model of information technology’s role in agility and entrepreneurial action within established organizations. They refer to the market forces that drive the need for agility as Schumpeterian market dynamics. We apply a synthesis of two seminal Schumpeterian theories to ERP research. We then relate these lessons to the Sambamurthy et al. framework. We conclude with a view of ERP as an amplifying technology that has the potential to amplify either adaptive or creative response, depending largely on firm-specific factors.