Impact of Cloud on Firm Evolution: A Causal Model of a Latecomer ERP Firm in an Emerging Economy

Abstract

Latecomer software product firms from emerging economies are often stuck in a low-growth trajectory due to the inherent market and resource challenges they face. However disruptive technological changes present these firms with an opportunity to break out of such a logjam and leapfrog to catch up with market leaders. Using naturalistic inquiry, we present a revelatory single case study of an Indian ERP product firm and find that in order to take advantage of such opportunities, latecomer firms must invest in sustainable product innovation capabilities, identify niche markets and launch suitable products. Systems thinking approach helps capture the delays and loops in the firm's responses and its evolution through time and supports our analysis presented through a causal map of the underlying dynamics. We situate our findings in the literature on transition of ERP firms to cloud based environments and revisit studies on latecomer firms from emerging economies.