The influence of ERP system usage on agile capabilities

Abstract

Purpose Synthesising theories of enterprise resource planning (ERP), psychological empowerment and agile capabilities, the purpose of this paper is to build and test a novel theoretical model linking ERP system usage with agile capabilities via users’ psychological empowerment in Jordanian commercial banks. Design/methodology/approach A questionnaire was developed to collect the relevant data based on the extant literature. The population of this study consisted of all ERP system users working at Jordanian commercial banks in Amman City. The questionnaire was circulated to a purposive sample of actual users of ERP systems for two reasons. First, it was not possible to obtain a list of actual ERP users in each bank, for security and privacy reasons. Second, actual users of ERP systems are the most relevant source of information. Findings The results revealed that ERP system usage has a significant positive impact on both agile capabilities and users’ psychological empowerment. The results also showed that users’ psychological empowerment has a significant positive impact on agile capabilities. In addition, the results provide empirical evidence that users’ psychological empowerment plays a mediating role between ERP system usage and all agile capabilities except responsiveness. Furthermore, by adding users’ psychological empowerment to the original research model, the study demonstrates a good predictive relevance for agile capabilities. Research limitations/implications The study only focuses on Jordanian commercial banks; it is a cross-sectional study; and the study data were subjective, reflecting respondents’ opinion on specific time. Practical implications Practitioners struggle to ensure high levels of ERP usage by target users, to achieve implementation success and to achieve expected benefits. More often, practitioners have focused on the ERP system project team, vendors and technical issues, but have ignored the human side of the implementation process. Hence, they have failed to acknowledge the role of psychological empowerment in ERP system acceptance and success. Practitioners are advised to promote the ERP system as a facilitation and empowerment tool for users rather than a means of surveillance and control. Moreover, practitioners can avoid high rates of ERP failure in the adoption and post-adoption stages by changing the aim of the ERP system introduction from increasing efficiency and visibility to enhancing users’ psychological empowerment. Practitioners can leverage agile capabilities to respond to changes in the business environment by ensuring healthy psychological empowerment for all ERP users to use the system to its full capacity and to exchange information between functional units in real time. Practitioners must ensure users’ psychological readiness to use the system before the system goes live. Originality/value The study developed and tested a new research model using the SmartPLS approach in a novel context.