Impact of an ERP system’s capabilities upon the realisation of its business value: a resource-based perspective

Using the resource-based view as a frame of reference, this study seeks to explore the potential link between the essential characteristics of an ERP system, defined as ERP capabilities, and its contribution to organisational performance. This contribution is conceptualised and measured through the value added by automational, informational and transformational effects of ERP capabilities upon the firm’s operational and managerial processes. Empirical data were obtained for the study’s purpose from three case studies of manufacturing firms, through 25 in-depth interviews of various managers, including the firm’s CIO. In addition to proposing an instrument to characterise an ERP system “as installed” in terms of three capabilities (ERP integration, ERP flexibility, ERP transversality), the study confirms that these capabilities are crucial in determining the contribution of an ERP system to organisational performance. The study also highlights different ERP effects on organisational processes and their relative importance in providing business value. While exploratory in nature, this study derives interesting implications from the data analysis in the form of propositions that may serve as research hypotheses in future studies.

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