ERP alignment for positive business performance: Evidence from Korea's ERP market

Abstract

This paper aims to examine conditions under which investment in enterprise resource planning (ERP) has a positive influence on business performance. Our empirical analysis on Korean firms that invested in ERP systems reveals how organizational integration modes need to be aligned with ERP systems for positive results from the ERP investment. Organizational integration modes refer to simultaneously used methods -people, standardization, and centralization - by which an organization coordinates and controls the activities of different departments within the same organization. The degree of alignment between ERP and integration modes is determined by the clarity of the ERP objectives, and positive results in terms of operational efficiency are correlated with the degree of alignment between ERP and these three integration modes.