Abstract:
An enterprise resource planning (ERP) system is an integrated suite of software
applications designed to automate a wide array of core businesses across functional
areas and to improve efficiency and effectiveness by integrating all systems those
increase financial performance. According to the Resource Based View approach,
companies can properly manage their resources through the organizational
capabilities also play an important role in improving financial performance. This
research aimed to investigate the impact of ERP implementation on financial
performance through the organizational capabilities as mediating variable at
manufacturing companies listed on Colombo Stock Exchange period in 2024. The
sample consisted of 284 firms, including both ERP adopters and non-adopters. The
research adopted a quantitative approach, utilizing a structured questionnaire to
collect primary data, which were analyzed using descriptive statistics, correlation,
and regression analyses. The results showed that the implementation of ERP system
has significant effect on financial performance and organizational capabilities.
Organizational capabilities also have a significant effect on financial performance. In
addition, organizational capabilities have proven to mediate the relationship between
ERP implementation and financial performance of the company. This study shows
evidence that ERP implementation makes an integrated operating system and can
increase organizational capabilities by utilizing existing resources, and ultimately
will also increase company financial performance. This study provides
recommendations for owners, investors, stakeholders and policymakers by
examining the impact of ERP implementation on financial performance mediating by
organizational capabilities. As limitations, it is challenging to find organizational
capability measures. This study only used one intervening variable so that the
information obtained from the results is still limited.
