This study investigates the capacity of ERP systems to improve sustainability by integrating various corporate processes, minimizing operational inefficiencies, and encouraging sustainable practices. A quantitative methodology was employed utilizing data collected from a survey of 247 SMEs in Malaysia. The data was analyzed using statistical approaches such as descriptive statistics, inferential statistics, and factor analysis. The findings illustrate that ERP systems play a pivotal role in augmenting sustainability practices among SMEs through enhanced resource efficiency, waste reduction, and more informed decision-making. Specifically, ERP implementation led to a 20% improvement in resource allocation, a 15% reduction in operational waste, and a 25% increase in the accuracy of sustainability reporting. However, limitations such as significant implementation costs and technological challenges hinder mainstream ERP adoption. The study highlights the importance of executive backing, sufficient financial resources, and specialized proficiency in effectively executing ERP systems. This research provides significant insights for SME owners, policymakers, and ERP providers, addressing ERP systems’ potential advantages and challenges in promoting sustainability. This paper provides insights for SME owners, policymakers, and ERP providers. For SME owners, the study underscores the potential for ERP systems to drive sustainability and operational efficiency. For policymakers, it emphasizes the need for supportive frameworks and incentives to mitigate the high costs and technical barriers associated with ERP adoption. For ERP providers, the findings suggest opportunities to develop more accessible and cost-effective solutions tailored to the needs of SMEs.