CEC Theses and Dissertations

Date of Award

2014

Document Type

Dissertation

Degree Name

Doctor of Philosophy in Information Systems (DISS)

Department

Graduate School of Computer and Information Sciences

Advisor

Joseph Gulla

Committee Member

Utako Tanigawa

Committee Member

Joseph Gulla

Committee Member

Amon Seagull

Abstract

Enterprise resource planning (ERP) systems are considered the price of entry in today's business environment, and the number of small and medium-sized enterprises (SME) retiring legacy systems in favor of ERP systems is increasing exponentially.

However, there is a lack of knowledge and awareness of ERP systems and their potential benefit and effect on performance, and overall value to SMEs. While ERP adoption costs and potential benefits are high, it is not apparent whether the end result will translate into higher productivity for SMEs.

The goal of this study is to evaluate the benefits that accrue to a firm on adoption of an ERP system. In the context of SME, a production function approach is used to assess benefits over short and long term. In addition to the production function approach, a variety of related methods such as those based on stock market valuation and Tobin's Q are examined.

Data were collected using the well-known CRSP datasets for SMEs. Analysis of data suggests that ERP implementation has no effect on firm's performance as measured by profit margins, Tobin's Q ratio and Labor productivity. In fact, ERP investments do not yield noticeable improvements on the performance measures even four years after implementation. Weaknesses in data suggest that the conclusion may be seen as tentative. The results of this research study, added value to the academic knowledge base by helping to understand the effects ERPs have on SMEs overall performance.

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