The Effect of Enterprise Resource Planning Sustainability on Operational Performance through Planning and Control

Abstract

The aim of this study is to analyze the relationship between enterprise resource planning (ERP) and its impacts on operational performance. The population is 98 manufacturing companies, ranging from medium to large size, domiciled in industrial area district of Sidoarjo East Java, Indonesia. Data collection used a questionnaire designed with a five-point Likert scale and each company represented by a middle manager. 38 questionnaires are considered correctly completed and valid for the data analysis. Data were then analyzed using partial least square (PLS) technique with smartPLS software. The result indicates that ERP sustainability results in improved operational process integration. The ERP sustainability has not strong enough influence to improve planning and control integration. Operation process integration affects planning and control integration. ERP sustainability has no effect on operational performance directly. And Operational process integration has no effect on operational performance directly. These findings contribute to the current research on the relationship between enterprise resource planning sustainability and operational performance with the inclusion of the operational process integration. The manufacturing company can adopt this finding to improve their operational performance