The Impacts of Enterprise Resource Planning System Adoption on Firm's Performance Among Medium Size Enterprises

Abstract

The main objective of this study is to investigate the impacts of ERP system adoption on the relationship between performance of medium enterprises (PME) and communication process (CP), organization structure (OS), technological change (TC), and technology infrastructure support (TIS) and moderated by top management support. This study proposes a theoretical framework based on theories such as resource-based view, contingency theory, and diffusion of innovation. The data was collected from the medium-sized enterprise firms operating in South Western Nigeria. Out of the 658 questionnaires distributed, only 355 were useable. The empirical data was analyzed using the partial least squares structural equation modelling and the results showed that CP, OS, TC, TIS, ERP and TMS have significant direct relationship with the PME. Hence, ERP system adoption mediates the relationship between the CP, OS, TC, and TIS with PME. The findings show that CP, OS, TC, TIS will influence the performance of medium enterprises in the adoption of ERP. The findings also confirm that the top management support plays an important role in moderating the relationship between ERP and PME. The findings provide important insights to CEO, managers, policymakers and researchers to understand the important use of ERP system that will enhance the performance of medium-sized enterprise organizations in Nigeria. Limitation of the study is based on medium-sized enterprise only and another limitation is that author has not included other measures of medium sized enterprises performance outside of the procurement area despite these factors could provide further insights to medium sized enterprises performance, and will be an interesting topic for future research. In this light, future research can focus on the evolution of small enterprises and large firms.