A Reliable Measurement Scale for Benefits of Enterprise Resource Planning (ERP)

Validating business benefits of Enterprise Resource Planning (ERP) became more challenging with extensions to the internet. We develop a scale to measure business benefits of the extended ERP system that includes external stakeholders’ perspectives. A questionnaire survey in ten leading ERP adopter firms supported by four in-depth case studies confirmed reliability of the composite measurement scale capturing quantitative and qualitative ERP benefits. Factor analysis confirmed four ERP business benefits found in previous research. Measurement scale and items, however, required substantial modification to construct a composite scale capturing ERP business benefits. The scale construction was based on ten large manufacturing firms and may need adjustment for application in other industries. Our scale improved both the consistency and reliability not only of post-implementation measures is also applicable for pre-adoption assessment before ERP implementation. Limited empirical studies of ERP measures in general and particularly outside the western world has created significant interest in challenges and benefits of adopting ERP in other regions. This study contributes by adding empirical findings from an emerging economy in Asia about a robust and reliable measurement scale for capturing ERP business benefits in a country with limited IT infrastructure, human resources and lower IT maturity.