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Improvement in Operational Efficiency Due to ERP Systems Implementation: Truth or Myth?

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  • Vijay K. Vemuri

    (Long Island University, USA)

  • Shailendra C. Palvia

    (Long Island University, USA)

Abstract

ERP systems are expected to provide many benefits, including improved business efficiency. However, they are also blamed for several business problems and failures. Past studies have analyzed investments in ERP systems based on net income, return on investment, new present value or change in market value of a firm. We argue that an analysis of more direct measures — intangible or tangible — would enhance confidence in the efficacy of ERP systems. We investigate the impact of ERP systems implementation on operational efficiency of medium sized firms in the pharmaceutical and chemicals industry. Our analysis of the data indicates that for a majority of the firms improvement of operational performance expected due to ERP systems did not materialize.

Suggested Citation

  • Vijay K. Vemuri & Shailendra C. Palvia, 2006. "Improvement in Operational Efficiency Due to ERP Systems Implementation: Truth or Myth?," Information Resources Management Journal (IRMJ), IGI Global, vol. 19(2), pages 18-36, April.
    • Handle: RePEc:igg:rmj000:v:19:y:2006:i:2:p:18-36
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    Cited by:

    1. Andrea Masini & Luk N. Van Wassenhove, 2009. "ERP Competence-Building Mechanisms: An Exploratory Investigation of Configurations of ERP Adopters in the European and U.S. Manufacturing Sectors," Manufacturing & Service Operations Management, INFORMS, vol. 11(2), pages 274-298, May.
    2. Su, Yi-fen & Yang, Chyan, 2010. "Why are enterprise resource planning systems indispensable to supply chain management?," European Journal of Operational Research, Elsevier, vol. 203(1), pages 81-94, May.

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