Impact of erp quality on individual performance; mediating role of perceived usefulness and perceived ease of use /

Abstract

Considering the manifold functions, Enterprise Resource Planning has obtained the vital importance now days; the main reason behind that success is its imperative role in the functional sectors of the economy. It is basically management related software that is used in business processes of any organization or industry which is used to combine multiple applications in business management. Furthermore, ERP is responsible for automation of numerous back office functions that are human resource, services, technology, accounts, reconciliations etc. It also assimilated the operations side of any industry or organization which includes planning of product, development, manufacturing, marketing and sales into one database application. ERP is called an enterprise or business application because it can be used by large business setups; hence they require customization and analysis of data by the professional teams and experts for needful up-gradations and proper timely deployment of functions. Among many other factors that affect ERP in any organization, some are most crucial for effective as well as successful ERP system implementation and they are related to quality. In general term, the term quality is considered as an important element of ERP system, which includes system quality (SQ), information quality (IQ) & service quality (ServQ), is influencing individual’s performance. Above mentioned three factors influencing or triggering the path of ERP ultimately affects the individual or business performance in any sector of organization. All three quality dimensions affect the perceived factors of usefulness and ease of use in an ERP system which has final stimuli on performance. This study answers some questions relating to the influence or forcing power of ERP quality dimensions on the output of end user in manufacturing organizations in Pakistan. This research proposes the model combining the DeLone & McLean model 1992 (revised in 2003) and Technology Acceptance Model presented by Davis in 1989 (revised and expanded by Venkatesh & Davis in 2003), to assess the output of end user that’s are using ERP system in manufacturing sector of Pakistan. The model was tested using data based on questionnaires collected from 360 users working in ERP system in various manufacturing sectors industries or organizations. Convenient sampling technique (Convenience sampling technique is a non-likelihood sampling method where respondents are preferred and chosen since their convenient availability and immediacy / vicinity to the investigator) is used and information gathered from questionnaires are analysed through testing reliability, testing validity, path Analysis and testing of goodness of fit of model with Partial Least Square Structural Equation Modelling Technique (PLS-SEM). This research investigates the elements associated with the measurement model through SEM-PLS by evaluating the reliability and then validity of the factors along-with reliability of the variables. Cross loading of each construct of the model as well as Cronbach’s alpha and composite reliability of every construct of proposed model is presented with interpretation of the results. Rendering the assessment of data with help of Partial Least Squares Structural Equation Modelling Technique (PLS-SEM), it is revealed that eight hypotheses were accepted and three were rejected on the basis of coefficient (β) values obtained from PLS-SEM. The research discovered that perceived usefulness and perceived ease of use are both positively influenced by quality of ERP; hence a significant relation is found with individual performance. Moreover, ERP information quality has no noteworthy effect on perceived factors of usefulness and ease of use, but it implies comparatively significant relation with individual performance, which means that PU and PEOU have no important and meaningful effect as mediators in IQ to IP relation. Additionally, it is also observed that perceived ease of use is also positively influenced by service quality of ERP while no significant relation was found with perceived usefulness, but service quality’s ultimate relation with individual performance has been found significant and strong, which reveals that service quality cannot directly upgrade the factors responsible for perceived usefulness but service quality can be effective only through relation with ease of use to effect usefulness. Furthermore, ease of use is having quite strong relation with usefulness and in the same way usefulness has strong and significant relation with individual performance. Finally, overviewing the goodness of model fit; the theoretical framework found to be significant & fit and all relevant measures validates the criteria of goodness of fit of proposed and tested model.