Cloud ERP Implementation and Firm Performance: Innovation Capability as a Mediator and Top Management Support as a Moderator

This study empirically investigates the impact of Cloud ERP systems on firm performance in small and medium-sized enterprises (SMEs), focusing on the mediating role of innovation capability and the moderating role of top management support. The purpose is to understand how the adoption and utilization of Cloud ERP influence financial outcomes, operational efficiency, innovation capabilities, and overall competitive advantage in SMEs. A quantitative research approach was employed, collecting data through a structured questionnaire distributed to 450 SME managers in KSA, yielding 198 valid responses. Statistical analyses, including regression, mediation, and moderation analyses using SPSS, were conducted to examine the relationships between Cloud ERP implementation, innovation capability, top management support, and firm performance. The findings indicate that Cloud ERP implementation significantly enhances firm performance in SMEs. Innovation capability partially mediates the relationship between Cloud ERP implementation and firm performance, suggesting that ERP systems foster innovation, contributing to improved organizational outcomes. Furthermore, top management support moderates these relationships, highlighting its critical role in maximizing the benefits of ERP investments. This study contributes to the literature by providing empirical evidence of the transformative effects of Cloud ERP systems on SME performance, elucidating the mechanisms through which ERP adoption drives innovation and organizational success. The study's originality lies in its comprehensive examination of both direct and indirect pathways linking Cloud ERP to firm performance. It underscores the importance of strategic management and technological integration in enhancing SME competitiveness in the digital era.