This research examines the relationship between ERP systems and innovation from a knowledgebased
perspective. Building upon the multi-dimensional conceptualization of absorptive capacity by
Zahra and George [Zahra, S.A., George, G., 2002. Absorptive capacity: a review, reconceptualization,
and extension. Academy of Management Journal 27 (2), 185–203], a theoretical framework is
developed to specify the relationships between ERP-related knowledge impacts and potential/realized
absorptive capacity for business process innovation. The implication of the knowledge-based
analysis in this paper is that ERP systems present dialectical contradictions, both enabling and constraining
business process innovation. The model highlights areas where active management has
potential to enhance the capabilities of a firm for sustained innovation of its business processes.
Future research directions are also outlined.
2007 Elsevier B.V. All rights reserved.