Does Integration of Business Processes and ERP Improves Supply Chain Performances? Evidence from Indian Capital Goods Industry

Abstract

In today’s competitive market environment coupled with post effect of globalization, managing supply chains is critical to any business. Rather than becoming function-oriented, firms are now selectively deploying valuable resources on automated processes operated through technology-enabled ‘information communication’ platforms to improve performance. However, there are visible gaps in integrating business processes with information-enabled domain like enterprise resource planning (ERP), which has the potential to bring in the radical improvement in firm’s performance. Again, integration always does not come with positive results, specifically to Indian capital goods sector. Under this consideration, an attempt has been made to explore this unknown domain with conceptualization of a hypothesized model. Data for validation of this study were collected through questionnaire from 25 different units under Indian capital goods industry and relationship proposed in the hypothesized framework is tested by using structural equation modelling. Analysis of result indicates a favourable disposition of the model framework wherein synergy between business processes and ERP, on an integrated mode, can fetch higher level of performance. Considering multiple performance-related issues deterring growth of India’s capital goods industry, it is strongly recommended to synergize business processes under information system domain in order to make business sustainable.