ERP and eBusiness Integration in the Extended Enterprise

Building on Resource Based View theory, we investigate the complementary effect between ERP and e-business technologies, and the impact of such effect on business performance. Different from previous studies that assume ERP and ebusiness technologies have direct effects on firm performance, this study argues that it is the complementarily use of the two IT resources to build integration capabilities that is more likely to create business value. We use a sample of 150 U.S. manufacturing firms and two different approaches to measure the complimentary effect. We present new empirical evidence that the complementary effect between ERP and e-business technologies in creating business value is stronger than the main effects of ERP or e-business technologies alone. Accordingly, firms should utilize and deploy ERP and e-business technologies in a mutually reinforcing manner by building both system integration and business process integration capability.