Optimising enterprise resource planning system to leverage a firm’s absorptive and adaptive capabilities

Abstract

Background: Enterprise resource planning (ERP) systems of enormous amounts of data. In the case where uncertainties and volatilities exist in a firm’s environment, this data can help a business to reconfigure and modify its capabilities to adapt to the emerging changes. However, as most studies have only focused on the evaluation of the methodologies and challenges of ERP implementation, only little seems to have been performed to evaluate how ERP systems can be scaled to leverage a firm’s absorptive and adaptive capabilities.

Objective: This research explores how ERP systems can be optimised to leverage the acquisition and assimilation of new information to bolster a firm’s absorptive and adaptive capabilities.

Method: Using a qualitative exploratory research approach, primary research was based on the manufacturing businesses in the Gauteng area. In this analysis, 23 operational managers who were purposively drawn from 23 manufacturing businesses were interviewed to discern how ERP optimisation leverages a firm’s absorptive and adaptive capabilities.

Results: Enterprise resource planning was found to create a business system that leverages new information acquisition and assimilation. Although this spawns a firm’s absorptive and adaptive capabilities, findings still revealed the adopted management philosophy and organisational culture to influence how ERP can be optimised to bolster the acquisition and assimilation of new information in product, operational and strategic changes and modifications.

Conclusion: The study concludes with a framework that offers new insights on how ERP can be optimised to bolster a firm’s absorptive and adaptive capabilities.