ERP System Implementation
| January 28
Prepared by Hammad Muhammad Abdo Submitted to Dr. Mona Kadry
| Research document
The Effect of ERP System Implementation on
Business Performance in the Egyptian Manufacturing Firms
Hammad Muhammad Abdo
Arab Academy for Science Technology and Maritime Transport
Technology is a tool that, when used properly, can make dramatic improvements in the productivity of operations and the work of support employees. As organizations strive to become more competitive in their product or service offering, they find themselves at the mercy of unanswered questions, excellence as achieved by their competitor's best practices, and ever changing technology.
As changes in technology advance rapidly in the 1990's, a new competitive approach was born that enabled organizations to compete on multiple competitive priorities, making them more competitive and taking competitors far to behind. The ERP technology enabled organizations to connect vendors, the organization, and customers in an almost easy manner with real-time, consistent, accurate communication and information.
There is currently many of researches concerning the effect of Enterprise Resource Planning (ERP) Systems on business performance. Previous researches have shown a mixed relationship between ERP and business performance where some suggested that ERP improves performance and others found that it does not.
The use of enterprise resource planning (ERP) software has become increasingly more common in a lot of today’s businesses. It is adopted in many firms in attempts of improving business performance. The concept of business performance can be operationalised as financial gains by the organization, operational improvements for the organization or intangible gains for the organization.
The benefits of ERP systems are usually overestimated by ERP vendors. Promises are made about performance such as fast return on investment (ROI) and fast decision making but such claims need to be researched and tested in order to establish their degree of correctness (Trott & Hoecht, 2004).
Since it's emerging in the early 1990s, the enterprise resource planning (ERP) system has become the nerve center of today’s businesses. An ERP system consists of many different components which access and process data across business functions and physical boundaries. The complexity of the system is beyond human comprehension and requires a team of knowledge workers to maintain the system beyond its implementation. A successful ERP system is one that supports the goals and strategies of a business and provides sustainable benefits to business (Keen, 1991; Neumann, 1994).
It is well known that successful implementation of an ERP system may bring immediate benefits to a business; however this effect may not last long. As time goes by, changes of the environment, turnover of members, and variations of customer demands may significantly impact existing processes and operations of a business. If the ERP is unable to adapt to and cope with these changes, its effectiveness is likely to disappear (Sheu, Yen & Krumwiede, 2003), and this in turn diminishes business performance. Robbins-Gioia (2002) surveyed a hundred enterprises and discovered that 46% of these enterprises enjoyed the benefits of ERP at the beginning of post-implementation but were unable to maintain the business performance in the long run.
There have been many theories and approaches to ERP implementation which have proven both success and unsuccessful results of ERP implementation. The intent of this study was to identify the relationship between successful implementation of ERP system and business performance.
The purpose of this research was to explore the relationship between implementing ERP systems and business performance...
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