A QUANTITATIVE STUDY ON IT-ENABLED ERP SYSTEMS AND THEIR ROLE IN OPERATIONAL EFFICIENCY

Abstract

This quantitative study investigates how IT-enabled enterprise resource planning (ERP) systems function as multidimensional organizational capabilities that meaningfully influence operational efficiency. Grounded in process integration theory, information-processing and coordination theory, resource-based perspectives, and IS success and net-benefit models, the research shifts the analytical focus from ERP adoption to ERP capability intensity. ERP capability is conceptualized as a second-order construct encompassing integration breadth, data quality and real-time availability, process automation intensity, and assimilation depth, each treated as measurable drivers of enterprise-wide workflow performance. Operational efficiency is modeled as a multidimensional outcome represented through indicators of time efficiency, cost efficiency, resource-use efficiency, and process-quality stability. A cross-sectional explanatory design was employed using data from 300 organizations across manufacturing, logistics, retail, and service sectors that had used ERP systems for at least one year. Confirmatory factor analysis established strong reliability, convergent validity, and discriminant validity for all constructs, while collinearity diagnostics confirmed model stability. Multiple regression and structural modeling showed that IT-enabled ERP capability significantly predicts operational efficiency, explaining a substantial proportion of variance (R² = 0.66). Real-time data accessibility emerged as the strongest predictor, highlighting the central role of timely, accurate information in operational decision-making. Integration breadth, automation capability, and analytics functionality also demonstrated significant positive effects, while user support and training contributed modestly. Mediation analyses revealed that ERP capability influences efficiency primarily through business process standardization, decision-making speed and accuracy, supply-chain integration, and employee productivity. These mechanisms collectively clarify how ERP enables synchronized workflows, reduces manual reconciliation effort, lowers error frequency, and enhances planning precision. Moderation analyses indicated that ERP effects are stronger in large firms, in highly complex operational environments, with longer ERP maturity, and where user competence and top management support are high. These contextual amplifiers underscore that ERP capability benefits are contingent on organizational readiness, scalability requirements, and sustained system assimilation. The study contributes to the ERP and operations literature by demonstrating that efficiency gains arise not from ERP adoption alone, but from balanced and well-developed capability dimensions. Practically, the findings highlight the strategic value of cross-functional integration, rigorous data governance, deliberate automation sequencing, and continuous user competence development.