Modelling the Effects of Intangible Capabilities on ERP Implementation

Enterprise resource planning (ERP) system is well recognised as a key technological infrastructure that facilitates business operations and growth in a dynamic business environment. Implementation of ERP system however is mirrored by numerous problems, a fact well cited in many academic studies. Research addressing the reasons for ERP implementation problems has identified a plethora of success factors. Following a similar research direction, we leveraged on the resource based view (RBV) to investigate the effects of firms’ capacity to deploy intangible resources with valuable and inimitable characteristics (termed as intangible capabilities) on successful ERP implementation. Three intangible capabilities were assessed, i.e. governance, knowledge and relationships. Using data collected from a survey with service firms in Malaysia, we found evidence that relationships capability effect towards successful ERP implementation was direct and significant. Further analysis revealed that governance capability reinforces the effects of knowledge and relationship capabilities toward successful ERP implementation. The empirical findings suggest that successful ERP implementation lie at the firms’ capacity to deploy and reconfigure their intangible capabilities of valuable and inimitable characteristics to create reinforcing superseding effects. We conclude that governance capability plays the antecedent platform role to strengthen the effects of knowledge and relationships capabilities on ERP project’s success.