Digital Service Innovation in the ERP Vendor Industry: A Case Study of a Dutch ERP Vendor Through the Dynamic Capabilities Perspective

Abstract

This study is set out to explore how the dynamic capabilities perspective creates value for the strategic management of digital service innovation (DSI) in the ERP vendor industry. A particular interest in this topic was founded through the development of the Software as a Service (SaaS) model. Furthermore, in combination with the ERP vendor industry, it is of interest to see how this important development has affected DSI. A specific interest in dynamic capabilities is chosen due to the fact that companies need to master these in order to survive in today’s rapidly changing environment. This thesis will start analysing the internal and external factors affecting dynamic capabilities of this topic, which will identify how they influence DSI in the ERP vendor industry in particular. Secondly, a developed framework of dynamic service innovation capabilities proposed by den Hertog, van der Aa & de Jong (2010) will be used in order to discover the dynamic capabilities for DSI in the ERP vendor industry. Lastly, a dimension of (digital) service innovation, namely the emerging technology of Machine learning, will be analysed as an innovation, as it is expected that this technology has an effect on the dynamic capabilities of DSI. Machine learning resides in the field of Artificial Intelligence, which has been proven to be tackled differently than other types of innovation. In order to explore this focus, a case study will be performed with a Dutch ERP vendor, in which a qualitative research method through in-depth interviews will be performed. Through this analysis, the above mentioned sections will be addressed. By applying the dynamic capabilities perspective on this topic, the internal and external factors affecting DSI in the ERP vendor industry are expected to both entail resemblances and differences. Furthermore, an altered new framework strategically managing DSI in the ERP vendor industry is expected. Lastly, a dimension of DSI, Machine learning, will give a demonstration of how dynamic capabilities might be affected. Subsequently, the value of the dynamic capabilities perspective for the strategic management of DSI in the ERP vendor can be determined.