Enterprise resource planning systems: comparing firm performance of adopters and nonadopters |
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| Institution: | 1. Department of Accounting, Bentley College, 175 Forest Street, Waltham, MA 02452 4705, USA;2. School of Accountancy, University of South Florida, Tampa, FL, USA;1. Department of Accounting and Information Technology, National Chung Cheng University, Chia-Yi, Taiwan;2. School of Economics and Business, 317 Netzer Administration Bldg., SUNY College at Oneonta, Oneonta, NY 13820, United States;1. Montpellier Business School, Montpellier Research in Management, 2300 Avenue des Moulins, Montpellier 34185, France;2. IAE Montpellier, Montpellier Research in Management, University of Montpellier, Place Eugène Bataillon, Montpellier 34000, France;3. Department and Graduate Institute of Business Administration, College of Management, Chaoyang University of Technology, No. 168, Jifeng East Road, Wufeng District, Taichung City 413, Taiwan;1. Production Technology & Management BIT Sindri, Dhanbad, Jharkhand 828123, India;2. Department of Production & Industrial Engineering BIT Sindri, Dhanbad, Jharkhand 828123, India;1. Department of Mechanical Engineering, SPCE, Mumbai University, India;2. Department of Information Technology, TSCE, Bandra, Mumbai University, India;3. Department of Mechanical Engineering, VNIT,Nagpur, Nagpuri University, India |
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| Abstract: | The current study examined the longitudinal impact of ERP adoption on firm performance by matching 63 firms identified by Hayes et al. J. Inf. Syst. 15 (2001) 3] with peer firms that had not adopted ERP systems. Results indicate that return on assets (ROA), return on investment (ROI), and asset turnover (ATO) were significantly better over a 3-year period for adopters, as compared to nonadopters. Interestingly, our results are consistent with Poston and Grabski Int. J. Account. Inf. Syst. 2 (2001) 271] who reported no pre- to post-adoption improvement in financial performance for ERP firms. Rather, significant differences arise in the current study because the financial performance of nonadopters decreased over time while it held steady for adopters. We also report a significant interaction between firm size and financial health for ERP adopters with respect to ROA, ROI, and return on sales (ROS). Specifically, we found a positive (negative) relationship between financial health and performance for small (large) firms. Study findings shed new light on the productivity paradox associated with ERP systems and suggest that ERP adoption helps firms gain a competitive advantage over nonadopters. |
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