The Impact of Enterprise Resource Planning Systems on Firm Performance

Debate exists regarding the contribution of information technology to firm performance. Prior research has examined technology and firm performance in the aggregate. This study, however, focuses on a specific technology—enterprise resource planning (ERP)—and its impact on firm performance. Economic and industrial organization theories are used to predict how ERP technology should affect firm coordination and transaction costs. ERP is expected to (1) reduce costs by improving efficiencies through computerization and (2) enhance decision making by providing accurate and timely enterprise-wide information. These effects should be associated with improved firm performance. This issue is examined empirically using archival financial data of COMPUSTAT firms that have implemented ERP systems compared to control firm counterparts. Results indicate a significant increase in costs as a percentage of revenue but a decrease in the number of employees as a percentage of revenue the year after ERP implementation. However, control firms experience a greater reduction in employees. Results indicate a paradox where firms having fewer employees supporting more revenue simultaneously experience higher cost to revenue ratios after their ERP implementation

Enterprise systems and innovations

This paper analyzes the relationship between the three main enterprise systems (Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM)) and firms' innovational performance. It studies whether the enterprise systems have impacts on process as well as product innovations. Using German firm-level data, the results show that ERP and SCM systems foster the firms' likelihood to generate process innovations. In addition, ERP systems also show a positive impact on process innovation intensity. These results do not only emerge for the short-run of two years or less but remain also stable in the long-run of two to four years. Concerning product innovational performance only, CRM systems increase the firms' likelihood to acquire product innovations, although the impact only emerges for the short-run and vanishes if the long-run perspective is taken into account. --Innovation,Product Innovation,Process Innovation,Enterprise Systems,Selectivity,Enterprise Resource Planning,Supply Chain Management,Customer Relationship Management

Enterprise Systems Adoption and Firm Performance in Europe: The Role of Innovation

Despite the ubiquitous proliferation and importance of Enterprise Systems (ES), little research exists on their post-implementation impact on firm performance, especially in Europe. This paper provides representative, large-sample evidence on the differential effects of different ES types on performance of European enterprises. It also highlights the mediating role of innovation in the process of value creation from ES investments. Empirical data on the adoption of Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM), Knowledge Management System (KMS), and Document Management System (DMS) is used to investigate the effects on product and process innovation, revenue, productivity and market share growth, and profitability. The data covers 29 sectors in 29 countries over a 5-year period. The results show that all ES categories significantly increase the likelihood of product and process innovation. Most of ES categories affect revenue, productivity and market share growth positively. Particularly, more domainspecific and simpler system types lead to stronger positive effects. ERP systems decrease the profitability likelihood of the firm, whereas other ES categories do not show any significant effect. The findings also imply that innovation acts as a full or partial mediator in the process of value creation of ES implementations. The direct effect of enterprise software on firm performance disappears or significantly diminishes when the indirect effects through product and process innovation are explicitly accounted for. The paper highlights future areas of research.Enterprise Systems; ERP; SCM; CRM; KMS; DMS; IT Adoption; Post-implementation Phase; IT Business Value; Innovation; Firm Performance; Europe

Enterprise Systems Adoption and Firm Performance in Europe: The Role of Innovation

Despite the ubiquitous proliferation and importance of Enterprise Systems (ES), little research exists on their performance impact, especially in Europe. This paper provides large-sample, economy-wide evidence on the differential effects of enterprise systems on performance of European enterprises. It also highlights the important mediating role of innovation in the process of value creation from ES investments. This study uses data on the adoption of ERP (Enterprise Resource Planning), SCM (Supply Chain Management), CRM (Customer Relationship Management), KMS (Knowledge Management System), and DMS (Document Management System) and investigates the effects on product and process innovation, revenue, productivity and market share growth, and profitability. The results show that all ES categories significantly contribute to product and process innovation. Most of ES categories affect revenue, productivity and market share growth positively. More domain-specific and simpler system types lead to stronger positive effects. None of ES categories contribute to profitability likelihood. The findings imply that innovation acts as a full or partial mediator in the relationship between ES adoption and firm performance

Impact of Enterprise Resource Planning Systems on The Accounting Information Relevance and Firm Performance

ERP (Enterprise Resource Planning) system is considered to provide benefits for the company. ERP systems provide useful accounting information for decision making. This study aims to determine the impact of ERP systems on the relevance of accounting information and firm performance on companies that adopt ERP and companies that do not adopt ERP. In this study the relevance of accounting information is tested with three variables of predictive value, timeliness and feedback value. The results of this analysis are obtained from questionnaires that have been distributed to 75 companies, consisting of 40 companies that adopt ERP system and 35 companies that do not adoption of ERP system, the samples obtained by each of only 30 companies so that there are 60 companies studied. The hypothesis in this study will be tested using Mann Whitney nonparametric analysis with SPSS to look for differences in the impact of the two types of firms. This analysis proves that the ERP system affects the relevance of accounting information consisting of three variables and firm performance on companies that adopt ERP systems

Enterprise systems and innovations

This paper analyzes the relationship between the three main enterprise systems (Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM)) and firms’ innovational performance. It studies whether the enterprise systems have impacts on process as well as product innovations. Using German firm-level data, the results show that ERP and SCM systems foster the firms’ likelihood to generate process innovations. In addition, ERP systems also show a positive impact on process innovation intensity. These results do not only emerge for the short-run of two years or less but remain also stable in the long-run of two to four years. Concerning product innovational performance only, CRM systems increase the firms’ likelihood to acquire product innovations, although the impact only emerges for the short-run and vanishes if the long-run perspective is taken into account

Defining the ERP and CRM integrative value

The value of IT adoption has been and still is a crucial question for the decision on IT adoption. In this paper we suggest a research model that aims at defining the integrative value of adoption of Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM) systems. The integrative value is described from the Resource Based View of the firm (RBV) and will be measured as impact on firm performance. The research model suggests six hypotheses that will be tested and analysed with data from a questionnaire among firms that have adopted both ERP and CRM systems in their organization. Due to the nature of the research model and the fact that it has not been tested in the past, the data analysis will be supported by Partial Least Squares (PLS. Our aim with this research project is that it will provide new knowledge on how integration between systems can positively influence value from IT investments, but also how different software such as ERP and CRM provides value to systems integration as well as process integration. (C) 2014 The Authors. Published by Elsevier Ltd.publishersversionpublishe

Enterprise Resource Planning Systems and Firm Value: An Event Study Analysis

There is considerable debate on the contributions of IT investments to firm value. Over a decade of research on the business value of information technology has produced mixed findings. This study focuses on the business value generated by a specific kind of IT systems, namely enterprise resource planning (ERP) systems. Studying the value created by ERP systems is appropriate and important for four reasons. First, ERP systems are being widely used by corporate community. Given the widespread adoption of ERP applications, it becomes essential to assess the contributions of these systems. Second, ERP systems typically encompass a wide spectrum of organizational functions. Given the wide functional coverage of ERP systems, they are likely to have a larger impact on firm performance than those information systems focusing on a specific function. Third, ERP systems require considerable investments in hardware, software, networking, and complementary organizational changes. Since ERP investments represent a critical IT expense for firms, it becomes important to assess the returns from ERP spending. Fourth, the reported failures of ERP systems by companies such as FoxMeyer Drugs, Applied Materials, Hershey, Mobil Europe, and Dow Chemicals have questioned the very viability of ERP systems. This is another compelling reason to ascertain the true contributions of ERP systems

Effects of management practices for using the SaaS system on performance of hospitality firms in Norway

The earlier literature either measured management practices in terms of the general management traits or did not account for the effects on firm performance. However, the transformation of the Enterprise Resource Planning (ERP) systems from general to more specific practices, the counteractive managerial goals and standardization and measurement issues requires the measures with more specific goals in a specific setting. The current paper aims at filling the gaps in measuring management practices and its effects on production costs and technical efficiency using daily data of 92 hospitality firms, i.e. chain hotels, in Norway from 2012 to 2014. We measured management practices in an index constructed from multiple criteria that capture managers' user patterns of the software-as-a-service (SaaS) systems. The empirical model identified inefficiency using a translog stochastic frontier input distance function (IDF). The findings show, on average, a 10% improvement in management practices increases production costs by 1.2%, but it improves efficiency by 0.9%. However, the marginal effect of improved management practices on the production cost is found to be U-shaped, while the marginal impact on inefficiency gradually declines to zero. The study also provides managerial implications on how to effectively use the ERP system and improve firm performance.publishedVersio

Enterprise systems and labor productivity: disentangling combination effects

This study analyzes the relationship between the three main enterprise systems (Enterprise Resource Planning (ERP), Supply Chain Management (SCM), Customer Relationship Management (CRM)) and labor productivity. It reveals the performance gains due to different combinations of these systems. It also tests for complementarity among the enterprise systems with respect to their interacting nature. Using German firm-level data the results show that the highest productivity gains due to enterprise system usage are realized through use of the three main enterprise systems together. In addition, SCM and CRM function as complements, especially if ERP is also in use. --Labor productivity,enterprise systems,complementarity,Enterprise Resource Planning,Supply Chain Management,Customer Relationship Management