We investigate the complementary effect between ERP and e-business technologies, and the impact of such
effect on business value creation. Previous studies have examined the effects of ERP and e-business technologies
independently, and show positive effects on business value from their use. However, both the resource based
view and microeconomic theory as well as practitioner experience suggest that the impacts from their joint
and complementary use should be much greater, but this proposition has not yet been examined empirically.
We use two different approaches (product term and direct measure approaches) to measure the complimentary
effect. Comparing results using firm performance accounting data with self-reported survey data of 150 U.S.
manufacturing firms, we provide confirming empirical evidence that the complementary effect between ERP
and e-business technologies in creating business value is stronger than the main effects of ERP or e-business
technologies alone. We further find that the complementary use of these IT resources to build system and
business integration capabilities can extract the most complementarity value for firms. These findings provide
empirical support for the theory of competitive advantage that the resource based view (RBV) proposes.
Furthermore, these findings provide practical guidance to firms on how to utilize and deploy ERP and
e-business technologies in a mutually reinforcing manner.
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