Abstract:
The present study provides empirical evidence on the economic benefits of enterprise
resource planning (ERP) systems. We use a modified value chain approach and
identify several ratios for each component of the value chain to reflect improvements
as a result of the adoption of ERP systems. These financial ratios are tracked for 2 years
for a group of companies that adopted ERP systems versus a group of companies
that did not adopt ERP. Both univariate and multivariate statistics are used to test for
differences. The key result of the present study is that the adoption of ERP systems
leads to sustained operational efficiencies and improved overall liquidity. In addition,
some support is found for increased profitability 2 years after the adoption of ERP
and for improvements in accounts receivable management.
