Absorptive Capacity and ERP Implementation in Indian Medium-Sized Firms

Whilst absorptive capacity has been identified as an important contributor to the effective implementation of IT systems, previous studies have failed to explicitly consider the contribution of individual and organizational knowledge processes. Nine case studies of Enterprise Resource Planning (ERP) implementation were undertaken. The case studies were all undertaken in SMEs in a developing country since this is an important but under researched area for the application of the concept of absorptive capacity. A particular implication of the findings is that firms lacking knowledge of IT implementation cannot simply seek this from external sources but must develop internal organizational knowledge processes if their implementations of IT systems are to be effective. This finding is particularly pertinent to the developing country and SME context of this study, where low levels of experience within the firm and the loss of experienced staff are found to impact on the development of absorptive capacity.