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Process efficiency of the enterprise resource planning adoption

Shaio Yan Huang (Department of Accounting and Information Technology, National Chung Cheng University, Chia‐Yi, Taiwan)
Shi‐Ming Huang (Department of Accounting and Information Technology, National Chung Cheng University, Chia‐Yi, Taiwan)
Tung‐Hsien Wu (Department of Accounting and Information Technology, National Chung Cheng University, Chia‐Yi, Taiwan)
Wen‐kai Lin (Department of Accounting, Providence University, Taichung, Taiwan)

Industrial Management & Data Systems

ISSN: 0263-5577

Article publication date: 25 September 2009

3574

Abstract

Purpose

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The purpose of this paper is to examine the performance of business processes, operational process efficiency and profitability of enterprise resource planning (ERP) pre‐ and post‐adoption in the long term. The paper also aims to examine the factors of ERP supplier types and firm size in Taiwan.

Design/methodology/approach

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The paper measures business process (structure capital value added and operational expense ratio), process efficiency (account receivable turnover and inventory turnover) and profitability (continuing operating income and net profit margin) of pre‐ and post‐adoption ERP. First, the overall samples are tested. Second, ERP performances are compared, classified as large, medium and small. Finally, the ERP performances, classified as international and local supplier, are compared using the Wilcoxon rank test.

Findings

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The results show that the business process, process efficiency, and profitability increase in the fourth or fifth years. This shows that the benefits of ERP are evident in the long term. Regarding firm size, big firms enhance their business process through process efficiency and financial performance. Medium‐sized firms raise continuing operating income only in the first five years. Small firms show no improvement. The results show that the business process, relating to process efficiency and profitability, demonstrates significant improvements in implementing international ERP vendors. Adversely, firms using local ERP systems have a diminished outcome in overall performance.

Practical implications

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This paper suggests that when companies plan to adopt an ERP system, large firms possess more advantages than medium‐sized or small firms and international ERP vendors are preferable to local systems.

Originality/value

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Previous research has rarely compared the results of process reengineering after ERP system implementation. This paper offers insight into ERP adopters in the electronics industry.

Keywords

Citation

Yan Huang, S., Huang, S., Wu, T. and Lin, W. (2009), "Process efficiency of the enterprise resource planning adoption", Industrial Management & Data Systems, Vol. 109 No. 8, pp. 1085-1100. https://doi.org/10.1108/02635570910991319

Publisher

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Emerald Group Publishing Limited

Copyright © 2009, Emerald Group Publishing Limited

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