- Volume 16 Issue 1
This study investigates the extent to which the implementation of enterprise resource planning(ERP) systems enhance the corporate performance by examining financial variables of the implemented firms against those of the control fm. A total of 346 observations were obtained from 160 firms, 80 implemented firms and 80 control firms, for the period of 1998-2002. Results from the study partly support the assertion that ERP improves the full spectrum of business functions such as selling, marketing, purchasing, warehousing, accounting and human resources by tightly integrating enterprise-wise information databases. First the profitability of the implemented group was different from that of the control group. The indicator (dummy) variable was able to explain the differences in total cash flows between the implemented group fm and the control group firms. Second, ERP turned out In improve the efficiency in managing assets. The indicator variable has the power in explaining the differences in the amount of accounts receivables between the implemented group firms and the control group firms. Third, the product turnover ratio of the implemented group was different from that of the control group. Fourth, the average value added per employee and the net income per employee of the implemented group firms were greats- than those of the control group firms. Finally, the average magnitude of the administrative expenses of the implemented group firms was smaller than that of the control group firms.