The Direct and Indirect Effect of Enterprise Resource Planning System Implementation on Firm Performance through the Organizational Capabilities as a Mediator
Euphrasia Susy Suhendra1, Mitha Filandari2, Emmy Indrayani3, Maulana4
1Euphrasia Susy Suhendra, Professor, Management, Gunadarma University, Indonesia.
2Mitha Filandari, Economics Graduate Majoring, Accounting and Master Graduate, Management Information System, Gunadarma University, Indonesia.
3Emmy Indrayani, Lecturer and Researcher, Gunadarma University Jakarta, Indonesia.
4Maulana, Lecturer and Researcher, Tamansiswa Palembang University, Indonesia.
Manuscript received on 01 September 2019 | Revised Manuscript received on 10 September 2019 | Manuscript Published on 23 September 2019 | PP: 588-597 | Volume-8 Issue-5C, May 2019 | Retrieval Number: E10840585C19/19©BEIESP | DOI: 10.35940/ijeat.E1084.0585C19
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Abstract: In the midst of rapidly changing business environment and technological advancement, ERP becomes the solution for companies to improve efficiency and effectiveness by integrating existing system thus that companies can increase their performance. Using RBV approach, companies can properly manage their resources through the organizational capabilities also play an important role in improving firm performance. This paper aims to examine the effect of ERP system implementation on firm performance both directly and indirectly through the organizational capabilities as intervening variable at manufacturing companies listed on Indonesia Stock Exchange period 2013-2017 which consists of 100 samples of ERP Adopters and Non-Adopters. The conceptual model in this study tested and analyzed using PLS-based SEM. The results showed that the implementation of ERP system has significant effect on firm performance and organizational capabilities. Organizational capabilities also have significant effect on firm performance. In addition, organizational capabilities have proven to mediate the relationship between ERP system and firm performance. This shows that the implementation of ERP system makes the information system to be integrated thus it enable companies to be more efficient and will affect the organizational capabilities in maximizing the utilization of company resources that ultimately can improve the firm performance.
Keywords: ERP System, Firm Performance, RBV Approach.
Scope of the Article: QOS And Resource Management