Assessing The Impact of Enterprise Resource Planning (ERP) Software on Human Resource Functions: The Moderating Role of Employee Satisfaction

Abstract

The influence of Enterprise Resource Planning (ERP) systems, which are becoming increasingly common in organizations, on the efficiency of Human Resource (HR) functions, is evaluated in this research. The study concentrates on the integral ERP components: system quality, information quality, quality of service, and user satisfaction in relation to their roles in enablers of enhancing HR function. Furthermore, the research investigates the moderating effect of Employee Satisfaction on the relationship between ERP system factors and HR functions, so that both technological and human factors of the ERP system effectiveness are well captivated. This study adopted the quantitative research approach; the method used was the survey method to obtain data from 250 HR professionals from FMCG compnaies who work with ERP systems on a day-to-day basis. A sample size of this magnitude was selected to achieve a robust analysis sufficient to provide generalizable insights. It has been found from the findings that all the four components comprising ERP namely System Quality, Information Quality, Service Quality and User Satisfaction in all the HR areas have significantly improved the HR functions thereby emphatically reflected significant impact of these systems in minimizing HR processes. Of note, the results indicate that Employee Satisfaction significantly moderates these effects so that Employee Satisfaction has a greater increasing effect on HR functions when Employee Satisfaction is higher. This also demonstrates the dual impact of technological excellence on the realization of potential of ERP systems, as also the employee satisfaction. This study has two implications. The results highlight the importance for practitioners to not only implement high quality ERP systems, but also create a supporting workplace that improves employee satisfaction to realize maximum benefits from ERP systems, for practitioners. This research is also particularly useful for academic scholars, since it contributes to the body of literature on ERP systems in HR management, through better understanding the synergistic effects of system quality and employee satisfaction and providing a framework for future research into ERP implementation and resulting organizational impacts.