Understanding the business value of information systems (IS) is one of the key issues among practitioners. Specifically, the role of IS in supply chain management (SCM) is one of the main areas that practitioners focus, as the largest portion of production costs are traceable back to supply chain costs. Hence, inter-organizational systems (IOS) gain importance as a result of the increased competition between supply chain networks. Particularly, implementation of enterprise resource planning (ERP), which is a type of IOS, becomes the new trend among organizations.
Although organizations use similar ERP, some gained significant benefits by using them, while others struggled to achieve the same level of success. The performance differences among ERP using organizations illustrate that ERP accrues several indirect benefits to organizational performance via intermediating organizational capabilities. SCM explorative and exploitative competencies are two such capabilities. Although, previous research indicates that ERP needs to be supported by mature SCM processes to maximize the benefits of ERP, there is still a lack of knowledge of how ERP is used to improve SCM competencies and increase performance.
Thus, the goal of this study is to evaluate the indirect benefits that accrue to organizations via the mediating effect of SCM competencies on the relationship between effective ERP usage for SCM and organizational performance. Customer relationship management (CRM), customer service management (CSM), supplier relationship management (SRM) are adopted as the three key ERP based SCM processes, and profitability, market value, and productivity are utilized as the three main aspects of overall organizational performance. PLS-SEM is used to investigate this relationship.
Overall, this dissertation demonstrates that effective ERP usage for SCM improves SCM competencies, which leads to higher organizational performance. Specifically, the results suggest that although effective ERP usage for CRM is related to both SCM explorative and exploitative competence, effective ERP usage for CSM experience better SCM explorative competence, and effective ERP usage achieves better SCM exploitative competence. The results also indicate that, while SCM exploitative competence influences all three aspects of organizational performance, SCM explorative competence affects only the market value and organizations that manage to balance SCM explorative and exploitative competence efforts outperform their competitors
