Perceived benefits of ERP system on perceived company performance among managers in Malaysian manufacturing companies

• Main Author: Asniati
• Format: Thesis
• Language: English; English
• Published: 2011
• Subjects: HD28-70 Management. Industrial management
• Online Access: https://eprints.ums.edu.my/id/eprint/42760/1/24%20PAGES.pdf; https://eprints.ums.edu.my/id/eprint/42760/2/FULLTEXT.pdf; https://eprints.ums.edu.my/id/eprint/42760/

Enterprise Resource Planning (ERP) system is a business management system that comprises integrated sets of comprehensive software that integrates all the business functions within an organization. The benefits of enterprise resource planning (ERP) include increased efficiency and productivity as well as cost reduction (Kakouris & Polychronopolous (2005). Similar to ERP, a Balanced Scorecard (BSC) has been globally adopted since introduced by Kaplan & Norton in 1992. Using benefits identified by previous researchers and combination of framework introduced by Shang & Seddon (2002) and Chand et al. (2005), an empirical study was conducted to examine the benefits at the three different managerial levels (operational, tactical and strategic decision levels) and the effect of ERP system adoption on business performance. A mixed methodology was adopted. The first stage involves semi-structured personal interviews of CEOs to develop a set of questionnaire. In the second stage, managers of Malaysian manufacturing companies are randomly selected to respond to the questionnaire to ask their perception about ERP system adoption benefits and company’s business performance. Data were analysed using descriptive and inferential statistics. Finally, interview was conducted to reconfirm the survey results with Malaysian manufacturing CEOs and managing director of ERP vendors. Overall, the findings suggest that ERP systems adoption has positive and significant effect on business performance. However, when the performance is divided according to the four perspectives of the balanced scorecard, the results show differences in the benefits. For the operational managers, the highest benefits are derived from improvements related to internal processes only. At tactical level, ERP adoption improves customer service, financial and innovation and growth performance. ERP adoption at strategic level improves customer service and financial performance. The finding provides evidence that today’s companies are serious about satisfying customers’ needs and the responsibility rests with the higher level managers. The output of this research can serve as a guideline for managers to improve or reassess their performance management system in line with ERP-scorecard frameworks. The findings also contribute to the knowledge and application of Management Accounting Systems and Management Information Systems.