Enterprise Resource Planning (ERP) business software has become one of the most successful products in the world. Microsoft, ICI, UBS and Procter & Gamble are a few of the firms that have claimed it has changed the way they work (Gartner, 2002). Indeed, substantial claims are made about the software's capabilities. A complete system could take several years and several hundred million dollars to deploy. SAP, Oracle, Baan and PeopleSoft are the market leaders and SAP has over 20,000 R/3 products installed worldwide; Oracle has installed databases in nearly every one of the world's top 500 companies. This paper surveys the literature and identifies that there is increasing evidence that firms fail to obtain the benefits of these investments within the anticipated timeframes (Pollock et al., 2003). Moreover, and more worrying for senior managers is the extent to which these fully integrated systems using on-line transactional processing are affecting the firm's innovative ability. We argue in this paper that there is a fundamental clash of underlying principles between ERP systems requirements and the success factors of innovative organisations that lie at the heart of the innovation dilemma caused by the introduction of ERP systems into organisations.