THE ROLE OF ENTERPRISE RESOURCE PLANNING (ERP) IMPLEMENTATION IN CORPORATE BUSINESS PERFORMANCE IN INDONESIA
Keywords:
Enterprise Resource Planning (ERP), Business Performance, Sustainability, Operational Efficiency, System Integration
Abstract
Introduction/Main Objectives: Enterprise Resource Planning (ERP) systems are comprehensive software solutions that integrate various business processes and functions across an organization. ERP systems are widely used in modern organizations for streamlining operations, improving decision-making, and enhancing overall productivity Background Problems: While most studies indicate a positive relationship between ERP and various aspects of business performance, the exact nature of this impact can depend on factors such as the specific performance metrics examined, the industry context, and how ERP interacts with other business processes and strategies. Novelty: research could further explore these nuances to provide a more comprehensive understanding of ERP's role in enhancing business performance. Research Methods: This research was conducted on Manufacturing Companies listed on the Indonesia Stock Exchange (IDX) in 2016-2021 by accessing data online at www.idx.co.id and on the company's official website. The statistical analysis techniques used in this study are Partial Least Squares Structural Equation Modeling (PLS-SEM).Finding/Results: ERP systems significantly enhance financial management by providing real-time financial data, which leads to more accurate forecasting and budgeting, ultimately improving financial decision-making and asset allocation Conclusion: The text further delves into the impact of ERP systems on business performance, citing previous studies that demonstrate positive effects on employee performance, financial results, and overall firm performance.
References
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Tusar, M. I. H., & Sarker, B. R. (2022). Spare parts control strategies for offshore wind farms: A critical review and comparative study. Wind Engineering, 46(5), 1629–1656. https://doi.org/10.1177/0309524x221095258
Almuhayfith and H. Shaiti, “The Impact of Enterprise Resource Planning on Business Performance: With the Discussion on Its Relationship with Open Innovation,” Journal of Open Innovation: Technology, Market, and Complexity, vol. 6, no. 3, p. 87, Sep. 2020, doi: 10.3390/joitmc6030087.
Aslam, et al., “Blockchain Based Enhanced ERP Transaction Integrity Architecture and PoET Consensus,” Computers, Materials & Continua, vol. 70, no. 1, pp. 1089–1109, Jan. 2022, doi: 10.32604/cmc.2022.019416.
Bandara, U. Jayawickrama, M. Subasinghage, F. Olan, H. Alamoudi, and M. Alharthi, “Enhancing ERP Responsiveness Through Big Data Technologies: An Empirical Investigation,” Information Systems Frontiers, vol. 26, no. 1, pp. 251–275, Feb. 2023, doi: 10.1007/s10796-023-10374-w.
Bataineh, I. Abu-Alsondos, H. A. Salhab, and L. S. Al-Abba, “A structural equation model for analyzing the relationship between enterprise resource planning and digital supply chain management,” Uncertain Supply Chain Management, vol. 10, no. 4, pp. 1289–1296, Jan. 2022, doi: 10.5267/j.uscm.2022.7.011.
Deng, W., Song, Y., Xu, J., & Zhao, H. (2020). A Novel Gate Resource Allocation Method Using Improved PSO-Based QEA. IEEE Transactions on Intelligent Transportation Systems, 23(3), 1737–1745. https://doi.org/10.1109/tits.2020.3025796
Dhar and M. A. F. Chowdhury, “Impact of Environmental Accounting Reporting Practices on Financial Performance,” International Journal of Asian Business and Information Management, vol. 12, no. 1, pp. 24–42, Jan. 2021, doi: 10.4018/ijabim.20210101.oa2.
Ercegovac, I. Zdrilić, and I. Klinac, “Bank specific determinants of EU banks profitability after 2007 financial crisis,” Management, vol. 25, no. 1, pp. 89–102, Jun. 2020, doi: 10.30924/mjcmi.25.1.5.
Faccia and P. Petratos, “Blockchain, Enterprise Resource Planning (ERP) and Accounting Information Systems (AIS): Research on e-Procurement and System Integration,” Applied Sciences, vol. 11, no. 15, p. 6792, Jul. 2021, doi: 10.3390/app11156792.
Govindasamy, C., & Antonidoss, A. (2021). Enhanced Inventory Management Using Blockchain Technology Under Cloud Sector Enabled by Hybrid Multi-Verse with Whale Optimization Algorithm. International Journal of Information Technology & Decision Making, 21(02), 577–614. https://doi.org/10.1142/s021962202150067x
Habibniya, S. Dsouza, M. R. Rabbani, N. Nawaz, and R. Demiraj, “Impact of Capital Structure on Profitability: Panel Data Evidence of the Telecom Industry in the United States,” Risks, vol. 10, no. 8, p. 157, Aug. 2022, doi: 10.3390/risks10080157.
Hamm, S. J. W., Yang, D. G., Lee, W.-J., & Jung, B. (2021). Organized Labor and Inventory Stockpiling. The Accounting Review, 97(2), 241–266. https://doi.org/10.2308/tar-2018-0117
Jo and D.-H. Park, “Mechanisms for successful management of enterprise resource planning from user information processing and system quality perspective,” Scientific Reports, vol. 13, no. 1, Aug. 2023, doi: 10.1038/s41598-023-39787-y.
Kitsantas, “Exploring Blockchain Technology and Enterprise Resource Planning System: Business and Technical Aspects, Current Problems, and Future Perspectives,” Sustainability, vol. 14, no. 13, p. 7633, Jun. 2022, doi: 10.3390/su14137633.
Kozlovská, P. Mésároš, and M. Spišáková, “Design of Economic Sustainability Supported by Enterprise Resource Planning Systems in Architecture, Engineering, and Construction,” Buildings, vol. 12, no. 12, p. 2241, Dec. 2022, doi: 10.3390/buildings12122241.
Lehenchuk, I. Polishchuk, V. Khodakyvskyy, N. Valinkevych, and A. Raboshuk, “Analysis of financial performance determinants: evidence from Slovak agricultural companies,” Agricultural and Resource Economics: International Scientific E-Journal, vol. 8, no. 4, pp. 66–85, Dec. 2022, doi: 10.51599/are.2022.08.04.03.
Malik, M. O., & Khan, N. (2020). Analysis of ERP implementation to develop a strategy for its success in developing countries. Production Planning & Control, 32(12), 1020–1035. https://doi.org/10.1080/09537287.2020.1784481
Mohamed, I. E. Ahmed, H. Hussain, and R. Mehdi, “Impact of corporate performance on stock price predictions in the UAE markets: Neuro‐fuzzy model,” Intelligent Systems in Accounting, Finance and Management, vol. 28, no. 1, pp. 52–71, Jan. 2021, doi: 10.1002/isaf.1484.
Molina-Castillo, R. Rodríguez, C. López-Nicolas, and H. Bouwman, “The role of ERP in business model innovation: Impetus or impediment,” Digital Business, vol. 2, no. 2, p. 100024, Jan. 2022, doi: 10.1016/j.digbus.2022.100024.
Morawiec and A. Sołtysik-Piorunkiewicz, “ERP System Development for Business Agility in Industry 4.0—A Literature Review Based on the TOE Framework,” Sustainability, vol. 15, no. 5, p. 4646, Mar. 2023, doi: 10.3390/su15054646.
Pizzi, G. Mastroleo, F. Caputo, and A. Venturelli, “The digitalization of sustainability reporting processes: A conceptual framework,” Business Strategy and the Environment, vol. 33, no. 2, pp. 1040–1050, Aug. 2023, doi: 10.1002/bse.3544.
Qureshi, “Evaluating Enterprise Resource Planning (ERP) Implementation for Sustainable Supply Chain Management,” Sustainability, vol. 14, no. 22, p. 14779, Nov. 2022, doi: 10.3390/su142214779.
Ren, S. (2022). Optimization of Enterprise Financial Management and Decision‐Making Systems Based on Big Data. Journal of Mathematics, 2022(1), 1–11. https://doi.org/10.1155/2022/1708506
Romagnoli, B. Maleki Vishkaei, P. De Giovanni, and C. Tarabu’, “The Impact of Digital Technologies and Sustainable Practices on Circular Supply Chain Management,” Logistics, vol. 7, no. 1, p. 1, Jan. 2023, doi: 10.3390/logistics7010001.
Thanh, “Designing a MCDM Model for Selection of an Optimal ERP Software in Organization,” Systems, vol. 10, no. 4, p. 95, Jul. 2022, doi: 10.3390/systems10040095.
Tung, L. T., & Binh, Q. M. Q. (2021). The impact of R&D expenditure on firm performance in emerging markets: evidence from the Vietnamese listed companies. Asian Journal of Technology Innovation, ahead-of-print(ahead-of-print), 447–465. https://doi.org/10.1080/19761597.2021.1897470
Tusar, M. I. H., & Sarker, B. R. (2022). Spare parts control strategies for offshore wind farms: A critical review and comparative study. Wind Engineering, 46(5), 1629–1656. https://doi.org/10.1177/0309524x221095258
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