Research Article: 2022 Vol: 28 Issue: 3S
Yanal Kilani, Isra University
Khaled A. Albustanji, Isra University
Citation Information: Kilani, Y., & Albustanji, K.A. (2022). Enterprise resource planning as an e-business solution and its role in supporting organizational internal operations. Academy of Entrepreneurship Journal, 28(S3), 1-15.
The current study aimed at examining the role of Enterprise Resource Planning (ERP) as an e-business solution of the success of internal operations within pharmaceutical manufacturing organizations registered in the Jordanian association of pharmaceutical manufacturers. Dimensions of ERP in current study included (Human Resource Management HRM, Customer Relationship Management CRM, Inventory Management IM, Financial Management FM and Production and Operation Management PO). Quantitative approach was utilized and a questionnaire was distributed on (97) respondents from pharmaceutical manufacturing organizations registered in the Jordanian association of pharmaceutical manufacturers. SPSS was used in order to screen and analyze gathered primary data; results of study accepted the main hypothesis articulated "ERP systems support organizational internal operations success" with an R = 0.69 which indicated that fact that ERP systems have the ability to develop success of internal operations. In addition to that, and among the chosen variables of ERP dimension; it was seen that (financial management) was the most influential in supporting internal operations with an R=0.64 indicating its role in supporting the success in internal operations. Study recommended that organizations should try to make the most of ERP systems by modifying these systems to suit their own internal processes and must be fully aware of the importance of exploiting all their resources and administrations in order to ensure the improvement of overall performance and make it more effective and efficient. The results of the study also indicated the challenges of implementing ERP systems, which were represented in the effort and time required to implement the ERP system and move from the old systems currently in companies to the modern ERP system, in addition to the need to train employees to use the new system.
Enterprise Resource Planning ERP, Human Resource Management HRM, Customer Relationship Management CRM, Inventory Management IM, Financial Management FM and Production and Operation Management PO.
The principle of business administration includes all internal and external business operations carried out by the organization, which are usually related to accounting, finance, human resource management, inventory management, marketing and many other processes such as decision-making and decision-taking (Al-Muhayfith & Shaiti, 2020). By its nature, business administration aims at managing operations and directing them towards achieving organizational goals and activating access to common goals between departments (Aremu et al., 2018). The organization adopts a lot of systems - especially in recent years - in order to reach its goals and achieve its profit goals. Among these systems is what is known today as the enterprise resource planning system (ERP), as this system is able to predict the work required, and manage the administrative information associated with this work, and stand on the organization's technical, operational and administrative needs (Wang et al., 2019).
Proceeding from the fact that these systems organize and plan the organization’s resources in order to achieve its goals, then they are fully capable of influencing the conduct of internal processes between departments and employees, and influencing the decision-making and decision-taking process, and then directing the efforts and resources of the organization towards what benefits of the organization as a whole; the current study aims to stand on the role of ERP as one of the technical solutions for business management and its role in raising the level of internal operations in the organization and its success, including achieving the goals and reaching the desired goals. For this, ERP dimensions were adopted, which included (Human Resource Management HRM, Customer Relationship Management CRM, Inventory Management IM, Financial Management FM and Production and Operation Management PO). Application of this study was done through applying it to a sample of pharmaceutical manufacturing organizations registered in the Jordanian association of pharmaceutical manufacturers in Jordan according to (JAPM) www.japm.com.
What's Enterprise Resource Planning ERP
Enterprise Resource Planning, known today by the acronym ERP, is a set of systems and programs that help in managing the internal operations of the organization by focusing on certain vital departments such as financial departments, supply chain, all internal operations, human resources, production and manufacturing, in addition to customer relations (Chofreh et al., 2018). As for Hasan et al. (2019), it was pointed out that ERP is a system that helps organizations to plan their resources and prepare management in order to carry out all major business in real time based on automated electronic programs. From another point of view, Al-Jawarneh & Al-Omari (2018); Taghipour et al. (2020) have argued that ERP is one of the categories of business management systems that include a group of integrated applications that help the organization to collect, store and interpret the data received by it and resulting from the internal processes in the organization.
Uses of ERP
Relying on ERP systems has a major role in linking the departments of the organization as a whole to a state of complete linkage between the front offices to deal with customers, and the back offices of the organization that deal with the internal operations as a whole (Chofreht et al., 2020). Samiei & Habibi (2020) believe that ERP systems contribute greatly to breaking down barriers, supplying information in a smooth and fast way, and prioritizing work in order to give the organization the ability to adapt to its environment in which it operates, in addition to arranging new work priorities. As for Sutduean et al. (2019); Rodriguez et al. (2019); Zafary (2020) and Menon (2019), they indicated that the most important uses of ERP systems included:
Finance
ERP systems, as a digital business solution, offer possibilities to increase profitability, as through artificial intelligence (AI), these systems provide an overview of financial resources, in a way that enables specialists to access information quickly and in the required time, and it also works to reduce costs by canceling Manual entries and reliance on automation, which facilitates organization within the organization.
Human resources: ERP systems contribute to simplifying the tasks of human resources management by providing payroll, employment characteristics, training needs in an automated manner, and it also facilitates the process of following up on the performance of employees, their access to organizational goals and identifying their problems before they occur.
Production and operations: ERP systems automate daily internal processes related to production and manufacturing, and maximize the level of fulfillment of customers' needs and needs through access to actual data, which will improve production and manufacturing management, and reduce costs, in addition to production planning in an easy and smooth way.
Supply chain management: Entering information, managing inventory and following up on supply chains manually takes a lot of time and effort. Hence, ERP systems came to provide integrated solutions for inventory management and supply chain through the Internet of Things (IoT), which was able to maintain and manage inventory in the most appropriate way.
Customer relationship management: The importance of ERP systems in customer relationship management is undeniable, as it contributed to providing a better customer experience and a more personalized shopping experience through artificial intelligence recommendations, which contributed to reducing fraud and growing the business of retailers (Hashem, 2021).
ERP as an E-business solution: Historically, ERP systems were groups of systems that worked in harmony, but without mixing with other systems, as each system worked in a separate way based on complex internal codes and systems, but they met the needs of the organization, but slowly, which led to Impact on the internal operations of the organization as a whole (Shafi et al., 2019).
The difference today is that these systems that were previously separate, but today they work within overlapping systems and connected to each other in one system, where they work to provide data within the organization within a sophisticated electronic network that contributes to linking data in order to obtain better and more insights effectiveness of the organization (Hamidi, 2018). In addition, ERP is viewed as e-business solutions as representing flexible information supply, sharing and dissemination options backed by security, flexibility, continuity and sustainability (Chang & Hsu, 2019).
Pros and cons of ERP: According to Oghazi et al. (2018) and Sørheller et al. (2018), enterprise resource planning is based on the optimal use of people and resources in order to increase productivity, performance efficiency and profitability, and therefore, relying on ERP requires that organizations be aware of the nature of the systems and programs used. Fadelelmoula (2018) asserts that the most important advantages of ERP include:
- Automation and simplification of internal processes - Department of financial and tax affairs - Ensuring cooperation between all departments of the organization - Provide improved analytics by relying on artificial intelligence - Improved on-demand and real-time information delivery
On the other hand, Sutduean et al. (2019) and Taghipour et al. (2020) introduced the idea that there are flaws in this system, including:
- ERP systems are rather expensive and their cost depends on the size of the organization and the size of its internal operations - The high cost of training employees to use these systems, which sometimes may reach millions of dollars - Difficulty moving from current systems to ERP systems - The need for additional business units in order to meet the business needs identified by ERP
Hypotheses Development
Sandouqa study (2020), which aimed to determine the impact and role of ERP in supply chain integration within pharmaceutical and pharmaceutical manufacturing organizations in Jordan. Relying on the descriptive quantitative approach, and by distributing a questionnaire to a sample of (183) managers and leaders of the organizations under study, the study came to the conclusion that ERP contributes significantly to the integration of the supply chain in the pharmaceutical industry organizations by affecting the integration between suppliers in this area. Thus, the study proved that ERP increases the integration of the internal processes of the pharmaceutical industries and leads to integration with customers.
Martins & Santos (2021) study which aimed to determine the role of ERP systems in the field of accounting in organizations at the levels of organizational structure, operations and employee performance; through the qualitative approach and the adoption of the semi-structured interviews tool, the case of 5 organizations in Portugal was studied. The study came to the conclusion that the successful implementation of ERP systems involves structural changes that include re-engineering of the internal structures of the organization and the functions of individuals, and therefore, the study proved that the restructuring resulting from the use of ERP systems supports many different factors for the success of organizations, including the workflow mechanism, Planning the organization's resources, and improving its performance.
Al-Hatabat study (2020) aimed to determine the impact of ERP and its systems adopted in organizations on financial, accounting and administrative practices in Jordanian manufacturing companies. The quantitative approach was adopted by distributing a questionnaire to a sample of industrial companies in Jordan. After analyzing the results, the study came to the conclusion that the adoption of ERP and its affiliated systems would provide an information platform for the organization on how to manage internal operations easily and smoothly, in addition to that ERP Facilitates the process of managing financial and accounting matters due to the possibility of accessing information in real time and upon request.
In the study of Kushwaha et al. (2018), the aim was to demonstrate the impact of the use of ERP systems on human resource management in three organizations operating in the automotive sector (Tata, Bosch and Pistons and Rings Ltd). Through the quantitative approach and the distribution of the questionnaire, the study came to the conclusion that the use of ERP contributes to raising the level of performance of employees through performance follow-up, statement of training needs for employees, development and development of performance in addition to the possibility of comparison between current performance and past performance in order to indicate points weakness and strength.
Al-Qudah study (2020), aimed to demonstrate the impact of ERP on supply chain integration and inventory management in Jordanian pharmaceutical manufacturing organizations. Relying on the quantitative approach, a questionnaire was distributed to a sample of employees working in pharmaceutical manufacturing organizations within the departments (Human Resources Department, Financial Department, Production Department, Supply Chain Department as well as Operations and Quality Department) within (183) individuals. Through the adoption of SPSS and SEM, the results of the study showed that ERP positively affects CRM, inventory management, financial management and production management, which leads to a significant positive impact on the integration with the supplier, the integration with the customer and the integration of internal processes, that is, there is a positive statistical relationship between ERP and integration with (suppliers and customers) for inventory management.
The study of Al-Jawarneh & Al-Omari (2018) aimed to identify the role and impact of ERP in improving the outcomes and mechanisms of customer relationship management in the Jordanian company Safeway. Relying on the quantitative approach, a questionnaire was distributed to a sample of (210) employees in Safeway Jordan, and the results proved that there is a statistically significant positive effect that combines ERP and CRM, stemming from the ability of ERP to create integration between the organization and customers through the possibility of access to Real-time information, forecasting customers' wants and tendencies, improving the relationship between customer service and management and giving customers a better shopping experience.
Al-Muhayfith & Shaiti (2020) study assumed that the application of ERP systems has a significant role in improving the performance of organizations, and this is what led them to try to determine the impact of ERP on the organizational performance (financial and non-financial) of small and medium Saudi organizations. Through the quantitative approach and the questionnaire, responses were obtained from (120) individuals working in these organizations, and the study, after analysis, concluded that ERP significantly affects the organizational financial and non-financial performance, but these positive results are dependent on administrative support, and Training for employees, in addition to user satisfaction with the systems that are employed.
The study of Mohamed & Farahat (2019) aimed to find out the relationship between the implementation of ERP, support for internal processes, and operational performance in organizations, in addition to developing a proposed framework for achieving ERP requirements within the total tourism organizations in Egypt. The qualitative approach was adopted through in-depth interviews with a deliberate sample of employees of tourism organizations in Egypt. The results of the study confirmed that ERP in all its dimensions contributes significantly to supporting the internal operational performance of organizations directly and indirectly, in addition to the ability of ERP to improve the level of quality of service provided (Figure 1).
Figure 1: Study Model
(Sandouqa, 2020; Al-Qudah, 2020; Al-Jawarneh and Al-Omari, 2018 and Ruivo et al, 2017)
Based on argument above, and launching from previous studies which tackled around current study's problem statement; researcher was able to develop following model to highlight nature of relationship between variables:
Based on above model, current study was built on following set of hypotheses:
Main Hypothesis
H: ERP systems support organizational internal operations success
Sub-Hypotheses:
H1: HRM systems support organizational internal operations success
H2: CRM systems support organizational internal operations success
H3: IM systems support organizational internal operations success
H4: FM systems support organizational internal operations success
H5: POM systems support organizational internal operations success
Methodological Approach
Current study managed to reach its main aim and objectives through depending on quantitative methodology which seeks the collection of primary data – through a tool – and facilitates this data in analyzing and screening to reach numerical results. After that, numerical results are explained and managed in a way that they connected to the phenomenon under examination, them the final conclusion is drawn.
Study Tool
Collecting primary data was done utilizing a questionnaire. The questionnaire was built by researcher through the aid of previous studies including (Sandouqa, 2020; Al-Qudah, 2020; Al-Jawarneh & Al-Omari, 2018; Ruivo et al., 2017). Researcher built the questionnaire in two sections, the first took into perspective demographics of study variables (age, gender, qualification and experience); while the other section included statements related to study sub-variables including (Human Resource Management HRM, Customer Relationship Management CRM, Inventory Management IM, Financial Management FM and Production and Operation Management PO) based on Likert 5 scale (1) Strongly disagree; (2) Disagree; (3) Neither agree nor disagree; (4) Agree; (5) Strongly agree. In its first version, the questionnaire was presented before a group of specialized academics and experts in the field for the sake of arbitration. In its final version, the questionnaire consisted of (32) statements to be responded to through sample individuals. Due to COVID 19 health precautions, questionnaire was uploaded online through Google Forms in order to avoid contact with others. The link was sent to participants with a cover letter that highlighted the main aim, goal and indications to complete the questionnaire and send it back to researcher.
Population and Sampling
Population of study consisted of all managers and leaders within pharmaceutical manufacturing organizations registered in the Jordanian association of pharmaceutical manufacturers in Jordan according to (JAPM) www.japm.com. A sample of (130) individuals were chosen to respond to the questionnaire. After application process, researcher was able to retrieve (97) properly filled questionnaire which indicated a response rate of (74.61%) as statistically valid.
Screening and Analysis
SPSS was used in order to tackle the collected primary data, Cronbach's Alpha was run and Alpha = 0.933 which indicated the reliability and consistency of study tool. Other statistical tests included:
- Mean and Standard Deviation - Frequency and Percentages - Multiple Regression - Linear Regression
Analysis
Demographics: Following table identified characteristics of sample individuals based on demographics including (gender, qualifications and experience). Results indicated that majority of respondents were males forming 75.3% of total sample. Major qualification for respondents was PhD forming 62.9% of the sample with an experience that ranged between 10–13 years forming 44.3% of the sample shows in Table 1.
Table 1 Sample Characteristics |
|||
---|---|---|---|
F | % | ||
Gender | |||
Male | 73 | 75.3 | |
Female | 24 | 24.7 | |
Qualifications | |||
BA | 13 | 13.4 | |
MA | 23 | 23.7 | |
PhD | 61 | 62.9 | |
Experience | |||
3-6 | 9 | 9.3 | |
7-9 | 29 | 29.9 | |
10-13 | 43 | 44.3 | |
+14 | 16 | 16.5 | |
Total | 97 | 100.0 |
Questionnaire analysis: Table 2 below indicated results of responses to questionnaire statements as according to analysis. It was seen that all statements scored higher than mean of scale 3.00 which was statistically positive, the highest mean was scored by statement articulated "Inventory can be done on time through ERP systems" with mean of 4.25/5.00; compared to least mean scored by statement articulated "ERP supports all recruitment processes to reach competence" with mean of 3.55/5.00.
Table 2 Statements And Variables' Analysis |
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Statement | Mean | Std. Deviation |
ERP makes sure that employees meet organizational needs | 3.61 | 1.07 |
ERP supports all recruitment processes to reach competence | 3.55 | 1.27 |
ERP systems are always able to select suitable employment criteria | 3.92 | 0.94 |
ERP systems supports team development | 3.85 | 1.00 |
ERP can initiate performance evaluation | 4.14 | 0.90 |
Human Resource Management | 3.81 | 0.75 |
Through ERP systems there are always quick orders and support for customers | 3.74 | 1.02 |
ERP can support quality services | 3.99 | 0.87 |
ERP is able to meet customers desires | 3.99 | 0.92 |
ERP guarantees long relationship with customers | 4.10 | 0.86 |
ERP systems forecasts customers' needs and desires | 3.99 | 0.92 |
CRM Management | 3.96 | 0.73 |
ERP is based on IT which supports organizations with its needs on time | 4.02 | 0.96 |
Inventory can be done on time through ERP systems | 4.25 | 0.95 |
Bar-coding is a part of ERP systems support | 3.80 | 1.15 |
ERP can inform on inventory level on re-order bases | 4.00 | 1.01 |
ERP can avoid loss and damage of materials | 3.65 | 1.14 |
Inventory Management | 3.94 | 0.67 |
Through ERP, there is a support for new sources of funds | 3.60 | 0.98 |
Internal operations are coordinated based on availability | 3.88 | 0.87 |
ERP provides schedules of liquidity, expenditures and liabilities | 3.80 | 0.87 |
ERP can support internal control and improve accuracy | 4.09 | 0.80 |
Financial risk management is supported through ERP | 4.13 | 0.80 |
Financial Management | 3.90 | 0.61 |
ERP can provide plans based on demand | 3.94 | 0.92 |
ERP can improve operations and efficiency | 4.09 | 0.85 |
ERP can improve order management | 4.15 | 0.82 |
ERP can adopt mass production | 3.97 | 0.99 |
ERP can plan cost reduction strategies | 4.12 | 0.73 |
Production and Operations Management | 4.06 | 0.61 |
Relations with suppliers are all supported and planned | 3.73 | 0.95 |
All organizational data are integrated within internal functions | 4.02 | 0.91 |
Internal operations development are supported through cross-functional team | 4.05 | 0.91 |
All experiences, info and knowledge are shared among employees for better communication | 3.98 | 0.97 |
Work flexibility is increased due to ERP systems | 4.10 | 0.88 |
Organization is able to achieve goals in a joint manner | 4.13 | 0.87 |
There is no conflict between goals within the organization | 3.98 | 0.97 |
Internal Operations | 4.00 | 0.73 |
Looking as Table 2 from a general perspective, all variables scored a mean that was higher than mean f scale 3.00 which was also taken positively. The highest mean was scored by variable of (Production and Operations Management) with a mean of 4.06/5.00, on the other hand, the least mean was scored by (Human Resource Management) with a mean of 3.81/5.00 but still statistically positive.
Hypotheses Testing
Main Hypothesis
H: ERP systems support organizational internal operations success
In order to test the aforementioned hypothesis, multiple regressions was utilized. The coefficient of correlation, r=0.69, indicated that there was a strong association between the independent variables and the dependent variable. In addition, it was discovered that the independent factors account for 48.9% of the variation of the dependent variable, which was significant. Furthermore, it was discovered that the F value was statistically significant at the 0.05 level, that meant ERP systems support organizational internal operations success shows in Table 3.
Table 3 Testing Main Hypothesis |
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Coefficients | ||||||||
Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | R | R Square | ||
B | Std. Error | Beta | ||||||
1 | (Constant) | 0.551 | 0.415 | 1.328 | 0.187 | 0.699 | 0.489 | |
HR | -0.082 | 0.115 | -0.084 | -0.710 | 0.480 | |||
CRM | -0.072 | 0.154 | -0.072 | -0.467 | 0.641 | |||
Inventory | -0.064 | 0.157 | -0.059 | -0.410 | 0.683 | |||
Financial | 0.604 | 0.124 | 0.502 | 4.872 | 0.000 | |||
Production | 0.479 | 0.130 | 0.398 | 3.675 | 0.000 |
Sub-Hypotheses
H1: HRM systems support organizational internal operations success
To test the aforementioned hypothesis, linear regression was utilized. The value of r= 0.295 indicated that there was a weak relationship between the independent variable and the dependent variable. Aside from this, it was discovered that the independent variable explains 8.7% of the variation in the dependent variable. Furthermore, it is discovered that the F value is statistically significant at the 0.05 level, which suggests HRM systems support organizational internal operations success shows in Table 4.
Table 4 Testing 1st Hypothesis |
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---|---|---|---|---|---|---|---|---|
Coefficients | ||||||||
Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | R | R Square | ||
B | Std. Error | Beta | ||||||
1 | (Constant) | 2.906 | 0.370 | 7.854 | 0.000 | 0.295 | 0.078 | |
HR | 0.287 | 0.095 | 0.295 | 3.012 | 0.003 |
H2: CRM systems support organizational internal operations success
To test the aforementioned hypothesis, linear regression was utilized. The value of r=0.333 indicated that there was a medium relationship between the independent variable and the dependent variable. Aside from this, it was discovered that the independent variable explained 11.1% of the variation in the dependent variable. Furthermore, it was discovered that the F value was statistically significant at the 0.05 level, which suggests CRM systems support organizational internal operations success shows in Table 5.
Table 5 Testing 2nd Hypothesis |
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---|---|---|---|---|---|---|---|---|
Coefficients | ||||||||
Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | R | R Square | ||
B | Std. Error | Beta | ||||||
1 | (Constant) | 2.680 | 0.389 | 6.885 | 0.000 | 0.333 | 0.111 | |
CRM | 0.333 | 0.097 | 0.333 | 3.448 | 0.001 |
H3: IM systems support organizational internal operations success.
To test the aforementioned hypothesis, linear regression was utilized. The value of r = 0.318 indicated that there was a medium relationship between the independent variable and the dependent variable. Aside from this, it was discovered that the independent variable explained 10.1% of the variation in the dependent variable. Furthermore, it was discovered that the F value was statistically significant at the 0.05 level, which suggests IM systems support organizational internal operations success shows in Table 6.
Table 6 Testing 3rd Hypothesis |
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---|---|---|---|---|---|---|---|---|
Coefficients | ||||||||
Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | ||||
B | Std. Error | Beta | R | R Square | ||||
1 | (Constant) | 2.625 | 0.427 | 6.152 | 0.000 | |||
Inventory | 0.349 | 0.107 | 0.318 | 3.268 | 0.002 |
H4: FM systems support organizational internal operations success
To test the aforementioned hypothesis, linear regression was utilized. The value of r = 0.64 indicated that there was a strong relationship between the independent variable and the dependent variable. Aside from this, it was discovered that the independent variable explains 41% of the variation in the dependent variable. Furthermore, it was discovered that the F value was statistically significant at the 0.05 level, which suggests FM systems support organizational internal operations success shows in Table 7.
Table 7 Testing 4th Hypothesis |
||||||||
---|---|---|---|---|---|---|---|---|
Coefficients | ||||||||
Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | ||||
B | Std. Error | Beta | R | R Square | ||||
1 | (Constant) | 0.991 | 0.375 | 2.643 | 0.010 | |||
Financial | 0.771 | 0.095 | 0.640 | 8.124 | 0.000 |
H5: POM systems support organizational internal operations success
To test the aforementioned hypothesis, linear regression was utilized. The value of r = 0.59 indicated that there was a medium relationship between the independent variable and the dependent variable. Aside from this, it was discovered that the independent variable explains 34.8% of the variation in the dependent variable. Furthermore, it is discovered that the F value is statistically significant at the 0.05 level, which suggests POM systems support organizational internal operations success shows in Table 8.
Table 8 Testing 5th Hypothesis |
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---|---|---|---|---|---|---|---|---|
Coefficients | ||||||||
Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | R | R Square | ||
B | Std. Error | Beta | ||||||
1 | (Constant) | 1.121 | 0.408 | 2.745 | 0.007 | |||
Production | 0.710 | 0.100 | 0.590 | 7.127 | 0.000 |
The current study hypothesized that ERP systems in all its forms can help in presenting a better success level for internal operations within organizations. In order to measure the truthfulness of this hypothesis; quantitative approach was utilized and a questionnaire was distributed on (97) individuals working within pharmaceutical manufacturing organizations registered in the Jordanian association of pharmaceutical manufacturers in Jordan according to (JAPM) www.japm.com. Sub-variables of study included (Human Resource Management HRM, Customer Relationship Management CRM, Inventory Management IM, Financial Management FM and Production and Operation Management PO). After analysis, study was able to reach following results:
- There appeared a high level of usage and awareness of ERP systems among pharmaceutical manufacturing organizations in Jordan, this was reached based on level of awareness that respondents had regarding ERP systems - Main hypothesis was accepted, and there appeared a positive and statistical relationship between ERP systems and internal operations with an R = 0.69 referring as statistically positive with a variance of 48.9% - Sub-variables of ERP were chosen (Human Resource Management HRM, Customer Relationship Management CRM, Inventory Management IM, Financial Management FM and Production and Operation Management PO). The highest variable scored through analysis appeared to be financial management are the most influential on internal operations success in terms of ERP systems as it sored a strong relationship and a variance of 41% - In the 2nd rank came variable of production and operation management which scored a medium relationship with a variance of 34.8% - 3rd and 4th ranks were scored by variables of CRM systems and inventory management systems with a medium relationship and a variance of 11.1% and 10.1% respectively - The weakest relationship was scored by human resource management with a variance of 8.7%
The study proved its claims, noting that there is a positive and statistically significant effect of ERP systems on the internal operations of the organization, and this effect was clear through the value of R, which was equal to (0.69) with an effect of 48.9%.
ERP Supports Financial Management Operations
The results confirmed that ERP has the ability to influence positively or negatively on the internal operations of the organization. The culmination of this impact was the ability of ERP systems to financial management in terms of data entry, which became automated and not manual, in addition to improving the mechanism for displaying financial and accounting data and presenting them in real time on demand in an organized and clear manner, which contributed to increasing the level of Financial management outputs in the most appropriate way possible. This is what both Al-Qudah study (2020); Al-Hatabat study (2020), as they have indicated that ERP systems facilitated the process of presenting and processing financial data in an integrated and good manner, as it represented the first destination for collecting financial data for decision makers, and therefore the effect is very clear through the results.
ERP Supports Production and Operations Management
On the other hand, the study demonstrated the average effect of human resource planning systems on production and manufacturing processes with a value of R that reached up to 0.59. On its active role in managing planning systems in an integrated administrative manner, this matter agrees with both Farahat (2019); Al-Muhayfith and Shaiti (2020) indicating that ERP has provided a lot for production lines through which the organization ensured smooth production, without wasting time and money, coupled with sustainability and flexibility in manufacturing.
ERP Supports CRM Operations
It was found through the study that ERP in all its dimensions has an impact on the internal operations of the organization, and this effect is represented in the organization’s ability to link between internal operations and customer relationship management by referring to the idea of processing customer data and transforming it into information and then presenting it to decision makers in order to take Important decisions, in addition, the study confirmed that ERP has the ability to predict the desires and tendencies of customers and convert these predictions into information that serves the stakeholder departments in order to take the necessary decisions to improve the level of service provided to customers, increase the level of customer satisfaction, in addition to providing an experience Better and richer shopping for customers and this is what you agree with Al-Jawarneh & Al-Omari (2018).
ERP Supports Inventory Management Operations
On the other hand, the role of ERP in inventory management was evident through the ability of these systems to adopt technology in supplying reports related to inventory on time, the possibility of conducting inventory on time through enterprise resource planning (ERP) systems, and providing coding service Al-Sharati as part of the support of Enterprise Resource Planning (ERP) systems, in addition to the possibility of reporting the stock level on the basis of re-ordering and avoiding material loss and damage, and this was confirmed by Al-Qudah study (2020); Sandouqa (2020) in their study.
ERP Supports HRM Operations
Human resources management - according to this study - was one of the departments least affected by the concept of ERP, where the results came with a weak relationship and the value of R reached 0.295, but the effect is still clear by referring to the idea that ERP contributed seriously to ensuring that employees meet organizational needs, In addition to supporting ERP all recruitment processes to reach efficiency, and determine appropriate recruitment standards, it was also found that ERP systems support the development of team capabilities and skills and have the ability to evaluate performance and this is compatible with both Kushwaha et al. (2018) and Martins and Santos (2021).
Usually, when starting any entrepreneurial work in the business world, owners are able to control the flow of financial and non-financial information in their organizations, and this is done by handling all business requirements such as spreadsheets, email monitoring, and manual data entries. With the development and expansion of the emerging organization, it becomes difficult to follow the daily operations, which forces the organization to adopt ERP systems that support internal operations and their daily repetition and facilitate the process of data storage, processing and then exit with information. In addition, with ERP it becomes easy to plan the organization's resources, such as production line planning, manufacturing, inventory, sales, marketing, and accounting in the same system. This simplifies the day-to-day operations of the organization and ensures easy and quick access to much of the organization's information for decision-making purposes.
Based on what was mentioned before, current study recommended:
1 Organizations should try to make the most of ERP systems by modifying these systems to suit their own internal processes
2 Organizations must be fully aware of the importance of exploiting all their resources and administrations in order to ensure the improvement of overall performance and make it more effective and efficient.
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Al-Jawarneh, N., & Al-Omari, Z. (2018). The role of enterprise resource planning systems ERP in improving customer relationship management CRM: An empirical study of safe way company of Jordan.International Journal of Business and Management,13(8), 86-100.
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Received: 04-Jan-2022, Manuscript No. AEJ-22-11027; Editor assigned: 06-Jan-2022, PreQC No. AEJ-22-11027(PQ); Reviewed: 17-Jan2022, QC No. AEJ-22-11027; Revised: 25-Jan-2022, Manuscript No. AEJ-22-11027(R); Published: 31-Jan-2022