ERP adoption and the value creation: Examining the contributions of antecedents

• Published in: Journal of engineering and technology management Vol. 33; pp. 113 - 133
• Main Authors: Ram, Jiwat, Corkindale, David, Wu, Ming-Lu
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.07.2014; Elsevier Sequoia S.A
• Subjects: Adoption; Business; Competition; Competitive advantage; Competitive business; Construction; Enterprise resource planning; Enterprise resource planning (ERP); Information systems; Innovation; Leadership; Mathematical models; Strategy; Structural equation modelling (SEM); Studies; Australia; Competitive advantage; Innovation; O32 - Management of Technological Innovation and R&D; Enterprise resource planning (ERP); Structural equation modelling (SEM); Adoption
• ISSN: 0923-4748; 1879-1719
• DOI: 10.1016/j.jengtecman.2014.04.001

There has been considerable debate about the role of enterprise resource planning (ERP) in driving competitive advantage. However, little is established empirically on the antecedent factors that could facilitate achievement of such an advantage of adopting ERP. Therefore, this study examines the role of antecedent factors in the organisational adoption of ERP projects for the achievement of competitive advantage. We draw on information system success and information system implementation theories to build a conceptual model to examine the role of antecedent factors in influencing the achievement of competitive advantage. We use the structural equation modelling (SEM) technique to analyse the survey data of 217 Australian companies and test the model. We find that organisations that understand the importance of certain antecedent factors and manage them appropriately can achieve competitive advantage with ERP projects. These factors include consideration of the system quality and organisational readiness at the planning stage for an ERP project. We have extended knowledge on the role of antecedent factors to successful organisational adoption of ERP by providing evidence that they are also significant predictors for the achievement of competitive advantage. Our study's findings indicate that establishing a clear understanding of necessary system attributes in the organisational context at the adoption stage of ERP is important for helping organisations achieve subsequent competitive advantage. Their understanding of potential system quality attributes, the business environment within which their organisation may operate, the internal organisational capabilities and desired strategic benefits, can help managers and ERP system developers implement strategies, leadership, resources, and commitment to achieve their desired benefits from ERP projects.