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

Darelle Groenewald,Boniface Okanga

doi:10.4102/sajim.v21i1.962

Darelle Groenewald, Boniface Okanga

Open Access

https://doi.org/10.4102/sajim.v21i1.962

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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.

Highlights

Enterprise resource planning (ERP) system’s optimisation leverages a firm’s absorptive and adaptive capabilities
It emerged from the findings that depending on the management philosophy and organisational culture, ERP optimisation leverages the acquisition and assimilation of new knowledge to bolster a firm’s overall absorptive and adaptive capabilities
Acquisition of new information Depending on the management philosophy and organisational culture on how ERP can be utilised, findings imply that ERP offers detailed insights on the unfolding trends to enable key sales personnel gain insight into the changes in market trends

Summary

Introduction

Enterprise resource planning (ERP) system’s optimisation leverages a firm’s absorptive and adaptive capabilities. As ERP creates an interactive interface between the business and its external business environment, it spawns the acquisition and assimilation of new information This bolsters a firm’s overall absorptive and adaptive capabilities. By aiding the interactive interface of a firm with its external business environment, ERP generates enormous knowledge repositories on a firm’s internal capabilities It offers detailed insights into the unfolding market and industry trends. As studies on ERP have been focused more on ERP implementation than on its leveraging effects (Shaul & Tauber 2013:9; Sheilds 2001:19), discerning how ERP can be optimised to spawn a firm’s absorptive and adaptive capabilities is still an important area that most of the contemporary studies have not explored. 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

Results

Discussion

Conclusion