The relationship between benefits of ERP systems implementation and its impacts on firm performance of SCM

Purpose – The purpose of this paper is to provide managers with a critical insight into the relationship between the benefits of enterprise resource planning (ERP) systems implementation and the impacts on firm performance of supply chain management (SCM). Design/methodology/approach – This study proposes a structural equation modeling (SEM) to analyze the relationship between ERP benefits and SCM performance. Hypotheses derived from the key benefits of adopting ERP system and related SCM practices presented by previous authors. An empirical survey is conducted to collect data from Taiwanese IT companies listed in the Taiwan Stock Exchanges on several aspects of firm competences and supply chain performance that adopted ERP systems and/or SCM systems. Findings – The results confirm the operational, tactical, and strategic benefits of ERP for the firm performance of SCM in the internal and external business processes, customer service, and cost management, except for the strategic benefits of ERP are not significant predictors of SCM performance in the external business process. Furthermore, responses show that ERP implementations in these Taiwanese companies have a significant impact on other companies, both small and medium‐size enterprise (SME), within the global supply chain. Originality/value – This study extends research efforts concerning the relationship between ERP benefits and SCM performance, which the unequivocally positive results are not surprising, yet differ from most of other studies. This fundamental framework is expected not only to aid managers to make better decisions on how they cultivate specific SCM competences but also to conclude that future research can extend the focus to the impact on SCM competences of the aid of external tools such as supplier/customer relationship management, and internet‐based collaborative commerce systems.