ERP and the Innovator’s Dilemma

A few weeks back I made some notes as I was thinking about the Innovator’s Dilemma and its relation to ERP and the big ERP vendors of today (SAP and Oracle). The Innovator’s Dilemma comes from Clay Christianson’s book entitled  The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business which develops the idea of disruptive innovation.  A disruptive innovation is a new idea or innovation that disrupts or destroys or replaces an existing market.

The existing leaders in the ERP space make a lot of money on selling licenses and maintenance for their products. Most of the major companies of the world are running on their software quite successfully and many a CIO have risen and fallen based on projects with these systems.

The problem is that as new technology comes along (, Workday, etc.) it is hard for these leading current companies to make the shift to these new ideas. The reason is that they are getting their income and their leadership from the old way of doing things and the new way brings risk and uncertainly and perhaps not a leadership position. The old ways created careers for the people who need to make the decision to pursue the new.

I figured someone has to have written on this before and sure enough I found several posts online saying the same. See Techcrunch’s article entitled Great Acquisition! Now Put A Fork in ERP and Innovator’s Dilemma at its Finest – SAP, Oracle and the Cloud. And I wrote about the Changing Landscape of Enterprise Software before too.

The same thing is happening in storage with existing large storage vendors seeing lots of start-ups and new ideas being developed. Perhaps the same with PCs and the rise of tablets and smart phones.

Disruptive innovation.

[wrote this post long ago and it never got published for some reason…]



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