A structural equation model for analyzing the impact of ERP on SCM

  • Authors:

  • Yi-fen Su;Chyan Yang

  • Affiliations:

  • Institute of Information Management, National Chiao Tung University, 1001 Ta Hsueh Road, Hsinchu 300, Taiwan, ROC and Department of Information Management, Minghsin University of Science and Techn ...;Institute of Information Management, National Chiao Tung University, 1001 Ta Hsueh Road, Hsinchu 300, Taiwan, ROC and Institute of Business and Management, National Chiao Tung University, 118 Zhon ...

  • Venue:
  • Expert Systems with Applications: An International Journal
  • Year:
  • 2010

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Abstract

Enterprise resource planning (ERP) and supply chain management (SCM) represent important information technology investment options for operation or IT managers, and have been acclaimed in the practitioner and academic literature for their potential to improve business performance. The purpose of this article is to provide further insights into the adoption of ERP systems and the impacts on firm competence in SCM. We propose a model featuring ERP benefits to firm competences in supply chain management. We also hypothesize that three constructs of ERP benefits positively impact firm competences in SCM. To clarify the relationships among these constructs, structural equation model (SEM) is conducted to examine the model fit and nine hypotheses. The SEM results clearly demonstrate that there exist close interrelations among the benefits of implementing ERP systems and firm competences in SCM. The data from Taiwanese IT firms was collected through interviewing of experts and surveys. The results provide empirical evidence that the beneficial impacts of ERP on the supply chain do lead to better overall SCM competence. That evidence confirms that operational benefits, business process and management benefits, and strategic IT planning benefits of ERP in turn enhance firm competences of SCM in operational process integration, customer and relationship integration, and planning and control process integration.