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Operating Performance in the Wake of ERP Implementation: Triangulating Results for Chinese Manufacturing Companies

Author

Listed:
  • Arline Savage

    () (McColl School of Business, Queens University of Charlotte)

  • Joesph Callaghan

    (Oakland University, Rochester, MI)

  • Li Dang

    (Cal Poly San Luis Obispo, CA)

  • Y. Sun

    (Beijing Technology and Business University, China)

Abstract

This paper reflects the first stage of research related to company performance in the aftermath of an ERP implementation. We obtained a unique set of data for 198 public Chinese manufacturing companies involved in enterprise resource planning (ERP) implementations from 1993 to 2006. We collected fundamental data from a survey of these companies, and then analyzed their ERP implementations and performance. We use structural equation modeling (SEM) of subjects’ perceptions to model firm operational performance as a function of effective ERP implementation that, in turn, is a function of both the level of CEO involvement and the extent of Business Process Reengineering (BPR). We find that operational performance is positively associated with ERP effectiveness, and that this effectiveness is positively related to both the level of CEO involvement and the extent of BPR. A subsequent stage of this research program will examine both accounting and market performance measures as possible validating measures of perceived operating performance. Consequently, measures from three levels will be examined: managerial perception, firm performance and market response to these ERP implementations. This three-prong approach enables us to triangulate results regarding the perceived and actual factors affecting the efficacy of the ERP implementations.

Suggested Citation

  • Arline Savage & Joesph Callaghan & Li Dang & Y. Sun, 2010. "Operating Performance in the Wake of ERP Implementation: Triangulating Results for Chinese Manufacturing Companies," Discussion Paper Series 2010-03, McColl School of Business, Queens University of Charlotte.
  • Handle: RePEc:msb:wpaper:2010-03
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    References listed on IDEAS

    as
    1. Xue, Yajiong & Liang, Huigang & Boulton, William R. & Snyder, Charles A., 2005. "ERP implementation failures in China: Case studies with implications for ERP vendors," International Journal of Production Economics, Elsevier, vol. 97(3), pages 279-295, September.
    2. Zhang, Zhe & Lee, Matthew K.O. & Huang, Pei & Zhang, Liang & Huang, Xiaoyuan, 2005. "A framework of ERP systems implementation success in China: An empirical study," International Journal of Production Economics, Elsevier, vol. 98(1), pages 56-80, October.
    3. Ge, Liping & Voß, Stefan, 2009. "ERP application in China: An overview," International Journal of Production Economics, Elsevier, vol. 122(1), pages 501-507, November.
    4. Hammer, Michael & Champy, James, 1993. "Reengineering the corporation: A manifesto for business revolution," Business Horizons, Elsevier, vol. 36(5), pages 90-91.
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    Keywords

    censored regression; interaction; moderating effect; Tobit;

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