Enterprise Resource Planning and Organisational Performance in the Nigerian Banking Industry
Keywords:
Banking Industry, Enterprise Resource Planning, Firm Performance, Human Resource Planning, Information Technology, Quality Planning
Abstract
This study examined the effect of Enterprise Resource Planning (ERP) on organisational performance in the Nigerian banking industry. The study adopted a descriptive survey research design. Access Bank Plc and Guarantee Trust Bank Plc in Lagos State were purposively selected from the industry, and the study population include 755 employees of the two banks. Purposive sampling technique was used to gather information from two hundred and sixty-one (261) employees of the organisations and questionnaire served as data collection tool. Descriptive statistic such as the mean, frequency distribution, and percentage of data collected to analyse data collected, whereas, structural equation modeling was employed to test hypotheses. Result of the study showed that human resource planning has a significant and positive effect on productivity and financial performance. Specifically, information technology has a significant and positive effect on productivity, quality planning has a significant and positive effect on productivity and financial performance, and productivity does not mediate the relationship between ERP system and financial performance. The research recommends that enterprise resource planning system should be considered an important tool for improving organisational performance, as it produces organisational synergies and stimulate development of highly efficient procedures that are critical to organisational success.
References
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Ahmad, S., Ibrahim, S, & Garba, S (2015). Enterprise Resource Planning (ERP) systems in banking industry: implementations, approaches, reasons for failures and how to avoid them. Journal of Computer Sciences and Applications, 3(2), 29-32.
Al-Nimer, M., Omush, A., & Almasarwah, A. (2017). ERP implementation in banks: success factors & impact on financial performance. Banks and Bank Systems, 12(4), 17-30. doi:10.21511/bbs. 12(4).2017.02
Al-Shboul, M. A. R., Barber, K. D., Garza-Reyes, J. A., Kumar, V., Abdi, M. R. (2017). The effect of supply chain management practices on supply chain and manufacturing firms’ performance. J. Manuf. Technol. Manag, 28, 577–609.
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Aremu, A.Y., Shahzad, A. & Hassan, (2018). Determinants of enterprise resource planning adoption on organisations’ performance among medium enterprises Scientific Journal of Logistics. 14 (2), 245- 255
Bharadwaj, A., El Sawy, O. A., Pavlou, P. A., & Venkatraman, N. (2013). Digital business strategy: Toward a next generation of insights. MIS Quarterly, 37(2), 471–482.
Bu, X. Z., & Cao, L. (2015). Study on the relationship between TQM implementation and corporate financial performance. 12th International Conference on Service Systems and Service Management, ICSSSM 2015. https://doi.org/10.1109/ICSSSM.2015.7170339
Candra, S. (2012). The Impact of ERP Success in Indonesia Company. Advanced Science Letters, 4(0), 1–3.
Chauhan, V., & Singh, J. (2017). Enterprise Resource Planning Systems for Service Performance in the Tourism and Hospitality Industry. International Journal of Hospitality & Tourism Systems, 10(1), 57-62.
Dimba, B.A. (2013). Strategic human resource management practices: Effect on performance. African Journal of Economic and Management Studies, 1(2), 128–137.
Harun, S., Dorasamy, M., Ahmad, A.A., (2022). Effect of ERP implementation on organisational performance: Manager's Dilemma. International Journal of Technology, 13(5), 1064-1074
Hatch, M. J., & Cunliffe, A. L. (2006). Organisation Theory. Oxford University Press.
lmudeen, A., & Bao, Y. (2018). Mediating role of managing information technology and its impact on firm performance. Industrial Management & Data Systems, 118, 912–929.
Kalu, C. C., & Emerole, G. A., (2017). Effects of human resource planning on employees’ career development: A Study of National Root Crops Research Institute Umudike Abia State, Nigeria (2011-2016). International Journal of Economics and Business Management, 3(10), 78-91.
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Marsudi, A. S., & Pambudi, R. (2021). The effect of Enterprise Resource Planning (ERP) on performance with information technology capability as moderating variable. Journal of Economics, Business, and Accountancy Ventura, 24(1), 1 – 11.
Meiryani, Fernando, E., Lindawati, A. S. L., Siagian, P., & Desyanti (2021). The effect of implementation of Enterprise Resource Planning system on labor productivity and net profit margin. The 5th International Conference on E-Commerce, E-Business and E-Government, 66–72 https://doi.org/10.1145/3466029.3466050.
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Mohamed, G. A., & Farahat, E. R. H. (2019). Enterprise Resource Planning system and its impact on tourism companies' operational performance. Journal of Sustainable Tourism and Entrepreneurship, 1(1), 69-85
Mutuku, M. N., & Nyaribo, W. M. (2015). Effect of information technology on employee productivity in selected banks in Kenya. Review of Contemporary Business Research, 4(1), 49-57.
Najadi, M. Al, Jannat, R., Ismaili, M. Al, & Jabri, N. Al. (2021). The impact of Enterprise Resource Planning system on the performance of accountants within Omanis manufacturing companies. International Journal of Academic Research in Business and Social Sciences, 11(7), 1698–1706.
Nawaz, M. N., & Channakeshavalu, K. (2013). The impact of enterprise resource planning (ERP) systems implementation on business performance. Asia Pacific Journal of Research, 2(4), 1–18.
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory (3rd ed.). New York: McGraw-Hill.
Nuryani, N. N. J., Windia, W., Susrusa, K. B., & Suamba, I. K. (2016). Financial performance of sustainable farmers’ cooperative (Koptan) in Bali: Leadership, organisational culture, participation, budget and TQM. International Journal of Agriculture System, 4(2), 203-217.
Oloo, C H. (2017). Quality control practices and organisational performance of mobile telecommunication firms in Kenyan. A research project submitted in partial fulfillment of the requirements for the degree of master of business administration at the school of business university of Nairobi
Perri, R. S., Mbreshtani, A., & Maloku, E. (2014). Impact of ERP on Performance of Albanian Companies: A Factorial Analysis. Romanian Economic Business Review, Romanian-American University, 8(1), 1-14.
Pirmanta, P., Tarigan, Z & Basana, S. (2021). The effect of ERP on firm performance through information quality and supply chain integration in Covid-19 era. Uncertain Supply Chain Management, 9(3), 659-666.
Putra, D. G., Rahayu, R., & Putri, A. (2021). The influence of Enterprise Resource Planning (ERP) implementation system on company performance mediated by organisational capabilities. Journal of Accounting and Investment, 22(2), 221-241.
Rezaei, M., Zare, M., Akbarzadeh, H., & Zare. F. (2014). The Effects of Information Technology (IT) on Employee Productivity in Shahr Bank (Case study of Shiraz, Iran). Applied mathematics in Engineering, Management and Technology, 1208-1214.
Schuh, G., & Kramer, L. (2016). Cybernetic approach for controlling technology management activities. Procedia CIRP, 41, 437–442. https://doi.org/10.1016/j.procir.2015.12.102
Sobh, T. (Ed.). (2010). Innovations and advances in computer sciences and engineering. Springer Science & Business Media.
Taouab, O., & Issor, Z. (2019). Firm performance: definition and measurement models. European Scientific Journal January, 15(1), 93-106.
Tapang, A. T., & Azubike, J. U. B. (2018). Effect of Enterprise Resource Planning Implementation on Financial Performance of Commercial Banks in Nigeria. Journal of Accounting and Financial Management, 4(6), 42–55.
Tarigan, Z. J. H., Siagian, H., & Jie, F. (2021). Impact of enhanced Enterprise Resource Planning (ERP) on firm performance through green supply chain management. Sustainability, 13, 4358. https://doi.org/ 10.3390/su13084358
Tapang, A. T., & Azubike, J. U. B. (2018). Effect of Enterprise Resource Planning implementation on financial performance of commercial banks in Nigeria. Journal of Accounting and Financial Management, 4(6), 42–55.
Tayyab, A.., & Ahmad, A. (2023). The role of enterprise resource planning system’s assimilation between top level management support and organizational performance: evidence from manufacturing sector of Lahore. Journal of Positive School Psychology, 7(2), 1028-1041
Ubah, C., & Ibrahim, U. A. (2021). Examining the effect of human resource planning on the performance of public sector organisations: Evidence from Nigeria. International Journal of Research in Business and Social Science, 10(5), 72–82.
Ursacescu, M., Popescu, D., State, C., & Smeureanu, I. (2019). Assessing the Greenness of Enterprise Resource Planning Systems through Green IT Solutions: A Romanian Perspective. Sustainability, 1-32
Vancouver, J. B. (1996). Living systems theory as a paradigm for organisational behavior: Understanding humans, organisations, and social processes. Behavioral Science, 41(3), 165–204.
Ahmad, S., Ibrahim, S, & Garba, S (2015). Enterprise Resource Planning (ERP) systems in banking industry: implementations, approaches, reasons for failures and how to avoid them. Journal of Computer Sciences and Applications, 3(2), 29-32.
Al-Nimer, M., Omush, A., & Almasarwah, A. (2017). ERP implementation in banks: success factors & impact on financial performance. Banks and Bank Systems, 12(4), 17-30. doi:10.21511/bbs. 12(4).2017.02
Al-Shboul, M. A. R., Barber, K. D., Garza-Reyes, J. A., Kumar, V., Abdi, M. R. (2017). The effect of supply chain management practices on supply chain and manufacturing firms’ performance. J. Manuf. Technol. Manag, 28, 577–609.
AlMuhayfith, S. & Shait, H. (2020). The Impact of enterprise resource planning on business performance: With the discussion on its relationship with open innovation. Journal of Open Innovation: Technology. Market, and Complexity, 6(87), 1-24, doi:10.3390/joitmc6030087.
Aremu, A.Y., Shahzad, A. & Hassan, (2018). Determinants of enterprise resource planning adoption on organisations’ performance among medium enterprises Scientific Journal of Logistics. 14 (2), 245- 255
Bharadwaj, A., El Sawy, O. A., Pavlou, P. A., & Venkatraman, N. (2013). Digital business strategy: Toward a next generation of insights. MIS Quarterly, 37(2), 471–482.
Bu, X. Z., & Cao, L. (2015). Study on the relationship between TQM implementation and corporate financial performance. 12th International Conference on Service Systems and Service Management, ICSSSM 2015. https://doi.org/10.1109/ICSSSM.2015.7170339
Candra, S. (2012). The Impact of ERP Success in Indonesia Company. Advanced Science Letters, 4(0), 1–3.
Chauhan, V., & Singh, J. (2017). Enterprise Resource Planning Systems for Service Performance in the Tourism and Hospitality Industry. International Journal of Hospitality & Tourism Systems, 10(1), 57-62.
Dimba, B.A. (2013). Strategic human resource management practices: Effect on performance. African Journal of Economic and Management Studies, 1(2), 128–137.
Harun, S., Dorasamy, M., Ahmad, A.A., (2022). Effect of ERP implementation on organisational performance: Manager's Dilemma. International Journal of Technology, 13(5), 1064-1074
Hatch, M. J., & Cunliffe, A. L. (2006). Organisation Theory. Oxford University Press.
lmudeen, A., & Bao, Y. (2018). Mediating role of managing information technology and its impact on firm performance. Industrial Management & Data Systems, 118, 912–929.
Kalu, C. C., & Emerole, G. A., (2017). Effects of human resource planning on employees’ career development: A Study of National Root Crops Research Institute Umudike Abia State, Nigeria (2011-2016). International Journal of Economics and Business Management, 3(10), 78-91.
Khudhair, A. Z., Husseini, S. A., Fam, S. F., Yahya, S. N., Ali Al-shami, S. S., Alantali, A. M., & Alderei, S. K. (2019). The effect of TQM in building customer loyalty in digital banking: A review. Religacion. Journal of Social Sciences and Humanities, 4(17). Retrieved from http://revista.religacion.com/index.php/about/article/view/276.
Labaree, O. (2020). Business Essentials. Retrieved 2020, from Investopedia: www.investopedia/terms/e/erp.asp
Lin, M. J. J., & Chen, C. J. (2008). Integration and knowledge sharing: transforming to long-term competitive advantage. International Journal of Organisational Analysis, 16(1/2), 83-108.
Marsudi, A. S., & Pambudi, R. (2021). The effect of Enterprise Resource Planning (ERP) on performance with information technology capability as moderating variable. Journal of Economics, Business, and Accountancy Ventura, 24(1), 1 – 11.
Meiryani, Fernando, E., Lindawati, A. S. L., Siagian, P., & Desyanti (2021). The effect of implementation of Enterprise Resource Planning system on labor productivity and net profit margin. The 5th International Conference on E-Commerce, E-Business and E-Government, 66–72 https://doi.org/10.1145/3466029.3466050.
Mohammadnour, A. (2021). The impact of Enterprise Resource Planning system of human resources on the employees’ performance appraisal in Jordan. Wseas Transactions on Environment and Development 17, 351-359.
Misita, M., Lapcevic, N., & Tadic, D. (2016). A new model of enterprises resources planning implementation-planning process in manufacturing enterprises. Advances in Mechanical Engineering, 8(5), 1–15.
Mohamed, G. A., & Farahat, E. R. H. (2019). Enterprise Resource Planning system and its impact on tourism companies' operational performance. Journal of Sustainable Tourism and Entrepreneurship, 1(1), 69-85
Mutuku, M. N., & Nyaribo, W. M. (2015). Effect of information technology on employee productivity in selected banks in Kenya. Review of Contemporary Business Research, 4(1), 49-57.
Najadi, M. Al, Jannat, R., Ismaili, M. Al, & Jabri, N. Al. (2021). The impact of Enterprise Resource Planning system on the performance of accountants within Omanis manufacturing companies. International Journal of Academic Research in Business and Social Sciences, 11(7), 1698–1706.
Nawaz, M. N., & Channakeshavalu, K. (2013). The impact of enterprise resource planning (ERP) systems implementation on business performance. Asia Pacific Journal of Research, 2(4), 1–18.
Nunnally, J. C., & Bernstein, I. H. (1994). Psychometric theory (3rd ed.). New York: McGraw-Hill.
Nuryani, N. N. J., Windia, W., Susrusa, K. B., & Suamba, I. K. (2016). Financial performance of sustainable farmers’ cooperative (Koptan) in Bali: Leadership, organisational culture, participation, budget and TQM. International Journal of Agriculture System, 4(2), 203-217.
Oloo, C H. (2017). Quality control practices and organisational performance of mobile telecommunication firms in Kenyan. A research project submitted in partial fulfillment of the requirements for the degree of master of business administration at the school of business university of Nairobi
Perri, R. S., Mbreshtani, A., & Maloku, E. (2014). Impact of ERP on Performance of Albanian Companies: A Factorial Analysis. Romanian Economic Business Review, Romanian-American University, 8(1), 1-14.
Pirmanta, P., Tarigan, Z & Basana, S. (2021). The effect of ERP on firm performance through information quality and supply chain integration in Covid-19 era. Uncertain Supply Chain Management, 9(3), 659-666.
Putra, D. G., Rahayu, R., & Putri, A. (2021). The influence of Enterprise Resource Planning (ERP) implementation system on company performance mediated by organisational capabilities. Journal of Accounting and Investment, 22(2), 221-241.
Rezaei, M., Zare, M., Akbarzadeh, H., & Zare. F. (2014). The Effects of Information Technology (IT) on Employee Productivity in Shahr Bank (Case study of Shiraz, Iran). Applied mathematics in Engineering, Management and Technology, 1208-1214.
Schuh, G., & Kramer, L. (2016). Cybernetic approach for controlling technology management activities. Procedia CIRP, 41, 437–442. https://doi.org/10.1016/j.procir.2015.12.102
Sobh, T. (Ed.). (2010). Innovations and advances in computer sciences and engineering. Springer Science & Business Media.
Taouab, O., & Issor, Z. (2019). Firm performance: definition and measurement models. European Scientific Journal January, 15(1), 93-106.
Tapang, A. T., & Azubike, J. U. B. (2018). Effect of Enterprise Resource Planning Implementation on Financial Performance of Commercial Banks in Nigeria. Journal of Accounting and Financial Management, 4(6), 42–55.
Tarigan, Z. J. H., Siagian, H., & Jie, F. (2021). Impact of enhanced Enterprise Resource Planning (ERP) on firm performance through green supply chain management. Sustainability, 13, 4358. https://doi.org/ 10.3390/su13084358
Tapang, A. T., & Azubike, J. U. B. (2018). Effect of Enterprise Resource Planning implementation on financial performance of commercial banks in Nigeria. Journal of Accounting and Financial Management, 4(6), 42–55.
Tayyab, A.., & Ahmad, A. (2023). The role of enterprise resource planning system’s assimilation between top level management support and organizational performance: evidence from manufacturing sector of Lahore. Journal of Positive School Psychology, 7(2), 1028-1041
Ubah, C., & Ibrahim, U. A. (2021). Examining the effect of human resource planning on the performance of public sector organisations: Evidence from Nigeria. International Journal of Research in Business and Social Science, 10(5), 72–82.
Ursacescu, M., Popescu, D., State, C., & Smeureanu, I. (2019). Assessing the Greenness of Enterprise Resource Planning Systems through Green IT Solutions: A Romanian Perspective. Sustainability, 1-32
Vancouver, J. B. (1996). Living systems theory as a paradigm for organisational behavior: Understanding humans, organisations, and social processes. Behavioral Science, 41(3), 165–204.
Published
2023-05-23
How to Cite
Ekpudu, J. E., Omoera, C. I., Ogunleye, O. J., & Odigie, M. E. (2023). Enterprise Resource Planning and Organisational Performance in the Nigerian Banking Industry. Global Journal of Accounting, 8(2), 55-69. Retrieved from http://gja.unilag.edu.ng/article/view/1748
Section
Articles
