Abstract
This study examines the impact of organizational commitment on upgrading ERP for maintaining the quality of information and the performance. Many manufacturing companies in East Java have been implementing ERP in managing their business. Although the ERP post- implementation has been continuously maintained by these companies, the inevitable changes and development in the current business practices have forced them to upgrade their ERP infrastructure. All ERP system upgrades require a commitment from both management and employees, which is also known as the organizational commitment. This research used the employees of 110 manufacturing companies in the region of East Java, which have been implementing ERP for more than two years. The response rate is quite good, as many as 90 questionnaires out of 110 distributed questionnaires are completed by the respondents. Data analysis has been performed using partial least square (PLS) technique. The result demonstrated that the organizational commitment brings a significant impact to the ERP infrastructure upgrade. The organization commitment shows a significant impact on the information quality, but does not show a direct impact towards the ERP performance. Similarly, the ERP infrastructure upgrade also shows a significant impact on the information quality, but does not show a direct impact on the ERP performance. The information quality has a positive impact on the ERP performance. In total, the organizational commitment directly and indirectly affects the ERP performance. The management commitment empowers the key user to be aware of the ERP system upgrading all the time. Keeping ERP to the most up-to-date condition will contribute to the high quality of the information. Furtherly, the best information quality provides the appropriate information in term of the right time and the right information in the decision making process. The appropriate information enables the top management to make decisions in the pursuit of improving the company’s performance.
Highlights
The intensity of business competition has forced manufacturing companies to build the business system to survive the competition at the global level
This study examines the impact of organizational commitment on upgrading ERP for maintaining the quality of information and the performance
All ERP system upgrades require a commitment from both management and employees, which is known as the organizational commitment
Summary
The intensity of business competition has forced manufacturing companies to build the business system to survive the competition at the global level. This is normally described as the post-implementation stage In this stage of post-implementation, the company will continuously apply renewal of ERP system in order to be able to maintain connection and integration with the rest of the system run by the company. This would create a fully integrated system which is commonly known as the extended ERP. Very few studies focus on the direct influence of ERP upgrading to the company performance
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