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

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.