Financial Constraints Help the ERP System Success Improving the SMEs’ Performance: An Empirical Study

Steph Subanidja , Mercurius Broto Legowo
European Research Studies Journal, Volume XXII, Issue 3, 294-304, 2019
EOI: 10.11214/thalassinos.22.03.020

Abstract:

Purpose: The study investigates if financial constraints help the ERP System success, and improve SMEs’ financial performance. Design/Methodology/Approach: There are 100 eligible data to be analyzed by using SPSS and the Smart-PLS. Findings: The results indicate that financial constraints have a significant impact on the success of the ERP System and the Indonesian SMEs’ performance. Furthermore, the ERP System helps to mediate between the financial constraints and the performance and the financial constraints are more crucial to improve the performance rather than the ERP system. Practical Implications: The financial constraints should be seen as an important instrument to improve the performance of both short and long-run periods of time. Then, it seems that in the future, the ERP will play an important role to improve the performance. Therefore, it needsl to prepare the implementation of the ERP system in a professionally way. Originality/Value: The study views the ERP system as an intervening variable, and as a new approach to mediate the financial constraints and the performance.


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