ERP use and value

Abstract

Consistent with the diffusion of innovation (DOI) model and resource-based view (RBV) theory, the purpose of this paper is to develop a research model for measuring enterprise resource planning (ERP) post-adoption and its consequence on small and medium enterprise (SME) performance. The model links six determinants based on DOI to explain “ERP use” and three on RBV to explain the “ERP value”, on which nine hypotheses are postulated. Testing was conducted through structural equation modelling, utilizing data from 558 web-surveyed firms in Portugal and Spain. Full sample analysis finds that competitive pressure, training, best-practices, compatibility, and efficiency are important antecedents of “ERP use”. Together with usage, collaboration and analytics capabilities contribute to “ERP value”. Cross-country analysis reveals that complexity is an important inhibitor for “ERP use” in Portuguese firms whereas it is a facilitator for Spanish firms. In addition, while for Portuguese firms, compatibility and efficiency are significant, they are not for Spanish firms. For “ERP value”, while use and collaboration are more important for Portuguese firms, analytics is more important for Spanish. The paper provides insight into how SMEs use and value ERP; however, the authors cannot speak empirically on the issue of whether value is sustained, or on maturity stages, or on the impact of different industries. The paper describes the first empirical research study on Iberian SMEs, thus adding a cross-country dimension to the innovation diffusion literature. Unlike the typical focus on ERP adoption found in the literature, this paper focuses on post-adoption stages, linking usage with value.