Determinants of Enterprise Resource Planning System Utilization : An Empirical Investigation of Organizations in Sri Lanka

Abstract

Despite substantial investments in Enterprise Resource Planning (ERP) systems, many organizations in developing countries struggle to achieve optimal utilization levels. This study investigates determinants of ERP system utilization among organizations in Sri Lanka, employing Diffusion of Innovation (DOI) theory and Technology-Organization-Environment (TOE) framework. A quantitative research design was adopted using stratified random sampling across multiple industries. Data were collected through structured questionnaires from 165 ERP users across 28 Sri Lankan organizations during September to October 2025. Multiple regression analysis examined relationships between six independent variables (compatibility, complexity, efficiency, best practices, training, and competitive pressure) and ERP utilization. Results revealed that competitive pressure (β = 0.316, p < 0.001) and compatibility (β = 0.221, p < 0.05) significantly and positively influence ERP utilization, collectively explaining 24.2% of variance (R² = 0.242, F = 8.408, p < 0.001). These findings highlight the primacy of external environmental pressures and system-organization fit.