The Impact of ERP Systems on Organizational Performance: The Role of Antecedents and Moderators

Introduction

An Enterprise Resource Planning (ERP) system is an enterprise application that embodies an implementation of the core business processes and administrative functions within the entire organization. Although there is an abundance of definitions (Acar et al., 2017a; Beheshti & Beheshti, 2010; Davenport, 1998; Holland & Light, 1999; Klaus et al., 2000; Shaul & Tauber, 2013), an ERP system is fundamentally characterized with four salient features: cross-functional integration, a central and shared database, embodiment of best industry practices, and a modular architecture—all intertwine and collectively serve to produce a comprehensive, consolidated, and unified view of the organization and its operations. Influenced by technology and competitive dynamics, business organizations are increasingly moving towards more inter- and intra-organizational integration to enable and facilitate more efficient execution of transactions and flow of information resources between the different organizational units. Enterprise systems have played a pivotal role in these transformations, as evidenced by the evolution of Material Requirement Planning (MRP) to Manufacturing Resource Planning (MRP II), then to Enterprise Resource Planning (ERP) systems. The latter systems are increasingly fanning out and bridging inter-organizational boundaries to link separate business partners and alliances.

The Information Systems (IS) literature makes generous claims about numerous ERP system benefits, tangible and intangible, operational and strategic, accruing to the adopting organization (Gabryelczyk, 2020; Khattak et al., 2013; Uddin et al., 2020; Usman et al., 2019). Empirically, however, the evidence to support these claims is either lacking or inconclusive. Indeed, there is plenty of evidence to refute a considerable proportion of this ever expanding list of potential ERP benefits, thanks to more than two decades of IS research devoted to the issue of Information Technology (IT) benefits and performance impact on the organization. Thus, although the well-known IT productivity paradox has long been settled, the question of just what an ERP system can do for an adopting organization, in return for the huge cost needed to implement these costly systems, remains an ever relevant and not sufficiently answered question to date.

There is a great deal of empirical research to date that has explored the impact of ERP systems on organizations. However, existing IS research has produced either of three conclusions: 1) investments in ERP projects failing to achieve expectations, 2) positive outcomes and impact on organizational performance, and 3) mixed, and often conflicting, results regarding the overall impact of ERP systems on organizational performance. Moreover, a preponderance of the existing IS research focuses primarily on the success (or failure) of the ERP implementation project, rather than on the post-implementation impacts of these systems (Alzoubi & Snider, 2020; Coşkun et al., 2022; Gattiker & Goodhue, 2005; Hietala & Paivarinta, 2021; Mahraz et al., 2020; Motiei et al., 2015; Nour & Mouakket, 2011; Shatat & Shatat, 2021). Yet implementation success stories are not guaranteed to extend beyond the “go-live” stage (i.e., post-implementation). Additionally, post-implementation success indicators, focusing on broad organizational performance parameters, are fundamentally more strategically oriented than implementation success indicators.