Antecedents of Enterprise Resource Planning and its Impact on Firm Perfromance with Supply Chain Integration as Mediating factor

In today’s knowledge based globalized business world, the contemporary organizations are thriving to apply the innovative as well as modern business techniques and tools in their products and processes regularly. Besides, the organizations give sufficient significance while building up their business organisms and operations in order to utilize the innovative methodologies alongside their other primary procedures. Based on the ERP (Enterprise Resource Planning) and prior literature on management of supply chain, this paper analyzed an integrated model of ERP assimilation and integration by using Saudi Arabian firms as a case. This paper addresses the questions (1) there is a positive link between technological, organizational and environmental factors and ERP implementation, and (2) that ERP implementation encourages SCI (Supply Chain Integration) and performance. The paper empirically examines the antecedents of ERP implementation on SCI which will lead towards the firm performance by using SEM (Structural Equation Modeling) as an approach. Moreover, ERP is used as a mediating factor by using quantitative data, collected from Tadawul. Tadawul is Saudi Arabian stock exchange, in which 167 firms are registered. The results of the paper, may add to the hypothetical comprehension of accomplishing a change in supply chain management, and might leave some imperative implications for the firms motivated by enhancing their supply chain performance. It is also found that the linkage from ERP implementation to SCI is very significant.


INTRODUCTION
and effectively. Cagliano, et. al. [1] analyzed that due to in expanded level of products complexity and outsourcing techniques the competitions from one solitary organization is increased to the chains of organizations. Rice and Hoppe [2] stressed that the effective supply chain management leads to competitive advantage. In general, the organization strategy for manufacturing is concentrated consider these issues from one particular country. Towards that end, the paper extends our knowledge about Internetenabled supply chains and identifies the greatest obstacles to their integration. This paper is structured in a way that this introductory section is followed by literature review of supply chain integration and enterprise resource planning. Then the next section summarizes the theoretical background of technology-organization-environment and resource based theory. Then the next section, presents the research model and the development of the hypotheses. The next section, discusses the planned methodology to test the research hypotheses, however, conclusions and future research avenues will be discussed in the last section.

Supply Chain Integration
SCM (Supply Chain Management) is an "integration of business processes" as defined by Kivimaa and Kern [3].
The conventional understanding in the SCM literature is that "the more integration the better supply chain performance". SCM also creates value for the organization, its partners as well as its shareholders (Lambert et. al. [4]).
SCM and integration has been distinguished as major factor to oversee supply chains and accomplish leading performance (Carmeli and Tishler [5]). Bagchi and Skjoett-Larsen [6] suggested that vertical integration in a supply chain must be exchanged with virtual integration and each node must focus on the processes which it implements better, leaving the rest of the chain to the other elements.
The ultimate goal of this exercise is that the entire processes across the supply chain is designed, managed and coordinated like one single unit. However, there are numbers of researchers argued that close collaboration and integration are not the best solutions in every case (Hayes and Wheelwright [7]). Moreover, it is obligatory to reconsider the prevailing perspective of integrated supply chain management. Lee [8] has revealed that an integrated supply chain works more than the cost reduction for any manufacturing organization

Enterprise Resource Planning
The consolidated strategic manufacturing model, which was established during the different stages of ERP as well as SCM has identified a number of treadles, characterized as structural and infrastructural model. This is being used by the organizations to develop their manufacturing strategies in terms of quality, cost, flexibility and delivery (Skinner [10]; Hill [11]; Hayes and Wheelwright [12]).
Besides the common efforts to keep the organization up to date in improving their operations, two other major areas of investment should be taken into considerations. The first area is the investment in integrated information systems, specifically ERP, while its application and manufacturing processes is subtle (Qing, et. al. [13]).
Davenport [14] suggested that the implementation of the ERP system by different organizations is being broadly studied in current literature, concentrating especially on the challenges during the implementation process. ERP implementation is related with a greater degree of information flowing with suppliers. ERP system is premeditated in order to increase the information inside the organization. The second area is the investment in particular practices that refer to lean production and TQM (Total Quality Management) models. These practices aim to gain a focus in process of the manufacturing arrangement and a pull manufacturing system, and to improve productivity and quality through these quality management techniques. There is vast variety of literature available on these manufacturing practices; however, this paper focuses on the first area which is the investment in integrated information systems, specifically ERP systems.
The integration of supply chain is examined in the academics from many perceptions. For instance, Narasimhan and Das [15] distinguished between SCI, customer integration, distribution integration, information integration as well as logistics integration. However, this paper concentrates on the upstream side of supply chain and its integration mechanism, and in particular those However, it is argued that, within these practices, it is necessary to recognize the distinctive factors. Cagliano, et. al. [16] revealed that several practices are intended to integrate the forward physical flows. These both methods of assimilating supply chain methods are not related in nature. The first way requires a closer combination of the manufacturing systems between customers as well as suppliers. The second way of integration or assimilation is intended to leverage information from supply chain participants to improve internal processes and operations management systems. The integration practices have been widely discussed in the academic literature as well as supported empirically. However, many studies support that if there is a greater level of integration there will be greater performance of the organization (Cagliano, et. al. [16]).
Therefore, this paper is not planned to analyze the importance of SCI methods or mechanisms but however to evaluate their relation or association with ERP system.

THEORETICAL BACKGROUNDS
This section provides TOE (Technology Organization Environment) framework and RBV (Resource Based View) as the theoretical rationale of the suggested model. The role of a firm as an initial adopter of ERP is still crucial for value creation to the firm. Therefore, this paper identifies the determinants of ERP implementation, its use and value creation process on the performance of firm.

TOE Framework
In 1990, Tornatzky and Fleischer [17]  Begek et. al. [20] argues that business value of IT appeals the amount through which IT is used by the firms towards their value chain. It is further argued that these IT capabilities initiated by ERP adoption and implementation enable firms to gain a competitive advantage against their competitors. Fig. 1 depicts theoretical framework.

Technological Context
Technological context is considered as which the firms can accomplish their competitiveness through innovation.

Organizational Context
The previous papers supported the notion that the more organizational resources firms have, the greater value they can get from IT use (Carneli and Tishler [21]; Clayton [22]

ERP Implementation
Since mid-1990s, numerous organizations have moved their IT innovations methodology from creating in-house frameworks in order to obtain application programming, for example, endeavor asset arranging (ERP) frameworks.
However, despite the strategic importance, the implementation of ERP raised the issue for both researchers and decision makers in business industries.

Measure of the Success in ERP Systems Implementation
As for the definition of a successful ERP implementation success, there are several different sets of instruments developed by the researchers. By the literature review, one of the schemes was well accepted, which was given by Zhe, et. al. [28]. By selecting and modifying the instrument developed by [28], and involved into measurements for the success of ERP implementation.
The measurements are defined in this paper by the

The Relationship between ERP Implementation and SCM Integration
The implementation problems fall into the following folders: un-matching business process, lack of top management supports, insufficient education and training, as well as the culture modification mentioned above. .
EPR was believed to be a strong support to SCM integration and performance from the following two perspectives. performance of SCM integration. The above wide analysis on the relationship between the ERP and SCI leads to the following hypotheses.
H2: ERP is positively associated with supply chain integration.

Performance Measures
Performance is utilized as the measure for effective supply Both these financial as well as operational factors and measures are therefore, taken up into consideration in this paper. Having said all this, it is therefore, hypothesized that the higher the level of integrated coordination the greater will be the benefits. This will lead to the following hypothesis as depicted in Fig. 2.

H3:
Supply chain integration is positively associated with firm's performance.

METHODOLOGY
The quantitative research methodology was adopted for this research; the survey questionnaire was developed by using three stages. At the first stage, the relevant measures of technological, organizational and environmental factors, ERP implementation, supply chain integration and its impact on performance in the literature was carried out to develop the survey questionnaire. At the second stage, a few meetings with managers to gauge the content and validity of the questionnaire were conducted. At the third stage, the questionnaire was pretested as a piloting with 10 originations to further check the validity and overall readability of the questionnaire. Obviously, these 10 organizations were excluded then from the main survey. Data was collected from a stratified random sample of organizations from the Saudi Arabia. By sampling an entire kingdom, the survey questionnaire was sent to the Saudi Stock Exchange (TADAWUL) listed organizations, which are 172 in number to date. Typical respondents were operations or general managers and therefore the data was collected from managers having enough seniority level to know about their organization.
Of the 82 questionnaires returned as total, 12 were incomplete, either blindly filled by the respondents or incomplete. The remaining 70 were useable, complete and valid questionnaires. These 70 questionnaires were used then for the analysis; it represents a response rate 40%. Convenience sampling technique was used because all the usable questionnaire were used for the analysis

Mediating Supply Chain Integration Constructs Measurement
The research practice in management research is dominantly based on SEM. For this paper, we have developed theoretical foundations and have used moderating factor. SEM technique is used to validate the research model. It is evident that, SEM examines the spontaneous and efficient effect of three independent variables (Technological, Organizational and Environmental) on ERP implementation and then the impact of these independent variables on the SCI and performance. The theoretical framework (Fig. 1) is operationalized by using the SEM shown in Fig. 2.
Following the rudimentary analyses of the data descriptively, which includes examination for outliers, data normality, kurtosis, skewness, mode, mean, median and standard deviations. The variables are grouped into a priori conceptualizations of appropriate sub-scales for barriers, SCI, and performance. The data is normally distributed and there are no outliers identified in the data. In the questionnaire survey, SCI as well as ERP implementation are measured based upon various initiatives that organizations usually use to coordinate supply chains using the ERP. In this context, the available literature as well as in depth interviews with the managers during the quantitative survey development helped to ground these measures. The extent of implemented SCI for each organization was measured on 1-5 Likert-scale (1 = not at all to 5 =fully implemented).

Independent and Dependent Construct Measurement
The  Fig. 2. Two of the excluded items or variables were constraints and awareness of innovative technology. It is noticed that, these two items or barriers are overlapping with technology costs/benefit items. The measures for performance are also reported in the literature. The degree of firm performance was based on the actual percentage of procurement and sales revenue/turnover conducted by using the SCI. It is, therefore, believed that the performance of firm is definitely based on faster delivery time, reduction in transaction costs as well as inventory management or turnover related to SCI (1-5 Likert: l = none; 5 = extensive).

Validity and Reliability of Data
The reliability of the factors seems satisfactory with Cronbach alphas of 70% as shown in Table 1. Construct validity of the factors is measured by testing that whether these factors are loaded in a scale on a common factor analysis. This is achieved by looking at the Eigen values of the factors, which shows all eigen values are exceeding the minimum required threshold of 1.0.

RESULTS AND DISCUSSION
This paper used SEM in order to test the hypotheses which are developed earlier. Table 2, tabulates the goodness of model fit for Fig. 2's SEM.
The modification figures have revealed that some of the variables must be undisturbed. For instance, decreased exchange costs contrarily related with yearly percent of offers/turnover by utilizing production network then again innovation expenses and advantages are not exhibited conversely with specialized aptitudes. In these cases, a blunder covariance between the two elements must be incorporated and the estimation model may be adjusted as need be. As before, modification figures are cautiously used and a parameter link is only released if it be interpreted substantively regarding both the directions. Table 3, tabulates the direct and indirect effects between the independent, mediating, and dependent variables for the model and Fig. 3