Business value of enterprise resource planning spending and scope: A post-implementation perspective
ISSN: 0368-492X
Article publication date: 27 July 2018
Issue publication date: 2 May 2019
Abstract
Purpose
The purpose of this study is to contribute to the existing knowledge about the value of post-implementation Enterprise Resource Planning (ERP) system at the firm level.
Design/methodology/approach
A questionnaire-based survey was conducted to collect data from 217 Malaysian firms that successfully implemented ERP system. Data analysis was conducted with partial least squares-structural equation modeling and partial least squares multi-group analysis techniques.
Findings
Higher ERP spending and greater ERP scope in the post-implementation stage were associated with higher performance gains.
Research limitations/implications
Among other limitations, relying on a small sample size and cross-sectional data of this study and lack of generalizability of findings tend to have certain limitations. An interesting direction for future research would be to extend this study by conducting a multi-level analysis to understand how ERP spending and scope would affect the micro-level performance.
Practical implications
Non-financial performance gain is another valuable outcome of ERP implementation. The choice between in-house and off-the-shelf ERP systems will have dramatic impacts on the future profitability of firms. ERP risk management team and related practices during implementation phase result in a significantly higher financial gain in the post-implementation phase.
Originality/value
This study assesses the business value of ERP at the post-implementation phase while accounting for key contextual and managerial issues, a topic that has received little attention to date.
Keywords
Acknowledgements
This research was funded and supported by Tarbiat Modares University research fund (Ref No: 31/6257), and an International Graduate Research Fellowship (IGRF) from University Putra Malaysia (Ref No: UPM/SPS/GS30834).
Citation
Ghobakhloo, M., Azar, A. and Tang, S.H. (2019), "Business value of enterprise resource planning spending and scope: A post-implementation perspective", Kybernetes, Vol. 48 No. 5, pp. 967-989. https://doi.org/10.1108/K-01-2018-0025
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited