ERP Usage and its Impact on Firm Performance : A Quantitative Study of Swedish SMEs

Purpose: In literature, there is not sufficient research of the impact of Enterprise Resource planning (ERP) usage on firm performance for small and medium sized Swedish companies. Therefore, the purpose of this paper is to provide clarifications regarding this topic by investigating two research questions: What factors drive ERP usage in small- and medium- sized Swedish enterprises? Does ERP usage affect Firm Performance in small- and medium- sized Swedish enterprises? Design/Methodology/Approach: To approach our research questions 10 hypotheses are constructed based on previous studies. Further, to gather the data required to test these hypotheses, a survey was sent to 1000 Swedish small- and medium-size enterprises which generated 100 responses. The data was later analyzed using a Partial Least Square Structural Model. Findings: The first outcome of this study is that the main drivers of ERP usage in Swedish small- and medium-sized enterprises are Top Management Support and Effective Project Management. The second outcome is that ERP usage has a significant positive impact on Firm Performance. Contribution/implication: The main practical contribution derived from our results is that small- and medium-size firms should focus on Top management support and Effective project management in order to increase their ERP usage, which in turn could lead to greater levels of firm performance. In the theoretical spectrum, we contribute to the literature by enhancing the importance of effective project management not previously tested in the ERP usage context and by adding question marks regarding the effect of certain variables on ERP usage.