The relationship between enterprise resource planning (ERP) implementation and intellectual capital under the moderating effect of organizational learning capability
Although Enterprise Resource Planning (ERP) systems alone are not the source of competitive advantage, they may do this indirectly through enhancing or supplementing the organization’s other strategic resources. Studies on ERP have not explicitly examined the interactions of ERP systems with other organizational capabilities to determine how investment in ERP systems can be leveraged into the creation of strategic resources of organizations. Further, ERP systems are large and complex, and the degree to which they are implemented throughout an organization can vary – this is described as the ERP scope. The scope of ERP implementation is believed to influence the degree of its effects on an organization. Relying on the literature on ERP effects, business value of information technology (IT) and the notion that organizations are learning systems which utilize their knowledge to create value and to accumulate further knowledge, this study examines the influence of the scope of ERP implementation on a strategic resource of organizations, namely intellectual capital, under the moderating effect of organizational learning capability. This study develops a research model to show the influence of the three dimensions of ERP implementation scope (breadth, depth, and magnitude) on intellectual capital and simultaneously the influence of organizational learning capability on these base relationships. The hypothesized relationships among variables are evaluated by a data set of 226 responses collected from manufacturing firms in Vietnam. With the support of SmartPLS version 2.0, the structural equation model is evaluated using the techniques of multiple regression analysis, and the moderation effects are analyzed using group comparison and product term approaches. The findings provide support for the hypotheses. The three dimensions of ERP implementation show a positive impact on intellectual capital. Organizational learning capability more or less moderates the relationship between ERP implementation scope and intellectual capital. As a result of the group comparison approach for moderation analysis, firms with a low level of learning capability are likely to have no effect of ERP implementation on intellectual capital. However, in the group with a high level of learning capability the breadth and magnitude of ERP implementation have a positive effect on intellectual capital. By using the product term approach, only the magnitude of ERP implementation shows an interaction effect with organizational learning capability on intellectual capital. The breadth and depth of ERP implementation appear to have minimal interaction with organizational learning capability. The results inform the literature on the business value of IT by demonstrating that an ERP system can become a strategic asset as its implementation has a positive effect on intellectual capital especially with the presence of a firm’s learning capability. Additionally, the research reveals another ERP effect (e.g. the effect on the intellectual capital of organizations) that complements the understanding of ERP effects that have been identified in prior studies. The findings practically contribute to managerial knowledge by showing that ERP implementation should not be considered in isolation, but rather organizations should build a substantial level of learning capability to fully obtain the positive effect of ERP implementation on intellectual capital.