This study explains how information systems provide competitive advantage in terms of organizational learning. Competitive advantage is based on organizational capabilities. Organizational capabilities are produced by organizational learning processes. Organizational learning processes obtain knowledge from information systems, interpret, distribute to the organization, and memorize the knowledge. During the iterative processes, knowledge may be unlearned, enhanced by the higher level knowledge acquisition processes, or used to produce organizational capabilities. In addition, organizational learning influences information systems and vice versa. Meanwhile, information systems are regarded as composite resources for competitive advantage.