Enterprise Resource Planning (ERP) system is indeed crucial for service operations competencies in Higher Education Institutions (HEIs). Previous studies ascertain that ERP system improves an operational efficiency and enhance competitiveness. Though literatures have indicated the importance of ERP system for enhancing a firm’s operational performance, there is only a small-scale of ERP adopters in HEIs; hence ERP application in HEIs are still at an embryonic level. Indeed, only few research exists and little is known about strategic resources acquired for achieving a high operations competencies and issues how ERP system, innovative technology enables a better performance. This implies that ERP system has not been perceived as an emerging innovation capability that improves operational cost and service efficiency. To enhancing such crucial understanding, this study reviews the benefits of ERPs, further identifies challenges and issues in implementing ERP system in HEIs. This study attempts to explain how HEIs could achieve competitive advantage through ERP system.