Impact of Business Flexibility Capabilities on Firm Performance: Es Perspective

Enterprise Resource Planning (ERP) systems have become transaction backbone of organizations in the private, governmental and non-governmental non-profit sector, seeking growth. According to research firm Gartner, fully 85% of the fortune 500 firms have implemented ERP and increasingly small to medium enterprises (SMEs) are finding ways to incorporate ERP systems. While on one hand when organizations are going for large scale ERP implementations, often a debate is raised whether ERP deployment contributes towards the business flexibility capabilities of firms or not. Using a conceptual model firmly grounded in the resourcebased view as a frame of reference was developed, hypotheses generated and tested for 53 large Indian manufacturing firms, with respondents being senior most business and IT executives to investigate the potential link between ES resources and its contribution to business flexibility capabilities and contribution of business flexibility capabilities on performance. For this, three important relationships are posited between: ES resources and business flexibility capabilities, business flexibility capabilities and firm performance and ES resources and firm performance Findings of this study highlights that ES resources was not positively associated with business flexibility capabilities, also association between business flexibility capabilities with firm performance was low. Based on the strong empirical evidence, the study suggested that ES resources are not contributing towards business flexibility capabilities and managers going for such systems should tread with caution. Key wordsResources, Capabilities, Firm performance, Resource based theory, Value creation, Business flexibility capabilities