Abstract
Two of the essential IT investment options that managers resort are supply chain management and enterprise resource planning. These options are known in the relevant literature as factors contributing to the enhancement of organizational performance. The objective of this study is to investigate the enterprise resource planning adoption and its influence on organizational performance through supply chain management. This article suggests a new model which applies enterprise resource planning with supply chain management to optimal organizational performance. Structural equation model was utilized to test the model fitting level and the four proposed hypotheses. The required data for this research was collected from 174 companies in Malaysia through prepared surveys. The results support, through empirical evidences, the existence of positive effects of enterprise resource planning on the supply chain which ultimately results in improved overall performance of the studied organizations.
Highlights
The dynamics of business atmosphere has placed important challenges on business organizations
As the literature review reveals that supply chain management (SCM) is positively affected by enterprise resource planning (ERP) (Akkermans et al, 2003) and organizational performance (OP) is positively influenced by ERP (Gupta & Kohli, 2006), we argue that there is a potential indirect linkage between ERP and OP mediated by SCM
The findings support that the ERP system can be considered as an important input to firms with its impact performance is mediated by SCM
Summary
The dynamics of business atmosphere has placed important challenges on business organizations. The advent of information technology (IT) has changed the roles and strategies of an organization, in which more emphasis are given to the strategic inter-linkages among firms in a chain of supplies and deliveries. ERP and supply chain management (SCM) initially serve different aspects of an organization, the need to incorporate IT into the management of a supply chain calls for the integration of ERP into SCM. This integration is deemed as a ‘natural and necessary process in strategic and managerial consideration’ (Koh, Saad, & Arunachalam, 2006) for an organization to remain at competitive edge
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