Role of cloud ERP on the performance of an organization

Abstract

PurposeCloud-based enterprise resource planning (ERP) enables an organization to pay for the services they need and removes the need to maintain information technology infrastructure. The purpose of this paper is to empirically test the role of cloud-based ERP services on the performance of an organization. Here, the performance is categorized as supply chain performance and organizational performance that comprises of financial performance and marketing performance. Contingent resource-based view (RBV) theory was used to develop a theoretical framework in which supply base complexity (SBC) acts as a moderating variable on the relationship between cloud ERP and the performance.Design/methodology/approachContingent RBV theory is used to explain the relationship between all identified variables in this paper. Partial least squares (PLS) based on structural equation modeling (SEM) is used to empirically test our theoretical framework.FindingsThe PLS-SEM analysis of 154 respondents supports the contingent RBV theory. Six hypotheses – out of the eight hypotheses formulated in this paper – are supported by data.Research limitations/implicationsGiven this study was conducted in India where the potential of cloud ERP has not been fully implemented yet, the results may reflect more of perceived usefulness of this technology. The authors have attempted to understand the effect of SBC as a moderator in the relationship between cloud ERP and organizational performance which may not be the only moderator affecting this relationship among other potential moderators.Originality/valueThis paper empirically validates the theoretical framework based on the contingent RBV theory as it mitigates the static nature of the resource-based view approach suggested in the seminal article of Barney (1991).