The Role of Enterprise Resource Planning (ERP) in Improving Organization’s Intellectual Capital

Abstract

The purpose of this study was to identify the influence of the management control system (MCS) on intellectual capital through the implementation of Enterprise Resource Planning (ERP) as an intervening variable. A theoretical model is developed that considers two concepts of MCS (the belief system and the boundary system) and the roles they play in enhancing intellectual capital. Data collected via survey from  57 managers of 36 companies in Indonesia that have implemented ERP system. This research used the partial least square to describe relationships between variables. Results suggest that belief system and boundary system has a positive influence towards intellectual capital through the implementation of ERP as an intervening variable on the companies that implement the ERP system in Indonesia. When the users experience that ERP is useful and easy to use, the users will use it well. Finding offer the implication for managers to start paying attention to the factors which can help to improve the users’ work performance. As the users’ performance improved the company’s intellectual capital will also be improved. Keywords: communication value; economic knowledge; individual context; management belief system; management boundary system