The impact of ERP systems on firm and business process performance

TLDR

The study highlights that, despite a limited sample of SCMS users, the relationship between ERP, SCMS, and performance offers insights that may prompt researchers and practitioners to reconsider the optimal mix of modules in diverse enterprise systems. The authors aim to challenge ERP vendors’ claims by examining the impact of ERP adoption on organisational performance and by providing evidence on the benefits of bundling ERP with supply‑chain management systems. They conducted a survey of firms that adopted ERP and/or SCMS, measuring overall firm performance with financial KPIs and business‑process performance using a supply‑chain operations reference model, and compared results to control groups. The results show no significant performance difference between ERP adopters and non‑adopters at either firm or process level, but longer ERP experience improves overall performance, and only firms that also adopted SCMS achieve higher process performance.

Abstract

Purpose The purpose of this article is to provide further insights into the adoption of enterprise resource planning (ERP) systems and the impacts on organisational performance. It aims at challenging existing claims of ERP vendors with regard to the benefits of their products and at providing evidence of the benefits of bundling ERPS with supply chain management systems. Design/methodology/approach A survey was conducted to collect data on several aspects of organisational performance in companies that adopted ERPS and/or SCMS and the respective control groups. Financial key performance indicators were used to measure overall firm performance and the supply‐chain operations reference model to operationalise performance at the business process (supply chain) level. Findings The key results contradict the claims of ERPS vendors insofar as no significant performance differences were found between ERPS adopters and non‐adopters, either at the business process level, or at the overall firm level. While it could be confirmed that the longer the experience of firms with ERPS, the higher their overall performance, no evidence was found of a similar effect on business process (supply chain) performance. Only those ERPS adopters that also adopted SCMS achieved significantly higher performance at the business process level. Originality/value Despite the small size of the SCMS user sample, the results do provide some important insights into the relationships between ERPS, SCMS and performance which might encourage both researchers and practitioners in that field to critically reflect on the “optimal” mix of modules and software packages within increasingly diverse forms of enterprise systems.