Source:
Journal of Management Information Systems, Volume 19, Issue 1, p.71-98 (2002)
Keywords:
Enterprise Resource Planning systems, information technology, ROI, productivity, productivity analysis
Abstract:
Enterprise Resource Planning (ERP) software systems integrate key business
and management processes within and beyond a firm’s boundary. Although the
business value of ERP implementations has been extensively debated in trade periodicals
in the form of qualitative discussion or detailed case studies, there is little
large-sample statistical evidence on whether the benefits of ERP implementation exceed
the costs and risks. With multiyear multi-firm ERP implementation and financial
data, we find that firms that invest in ERP tend to show higher performance
across a wide variety of financial metrics. Even though there is a slowdown in business
performance and productivity shortly after the implementation, financial markets
consistently reward the adopters with higher market valuation (as measured by
Tobin’s q). Due to the lack of mid- and long-term post-implementation data, future
research on the long-run impact of ERP is proposed.
Notes:
Fulltext of early draft provided below.