An empirical investigation of the effectiveness of enterprise resource planning (ERP) systems, as assessed by management accountants

Enterprise Resource Planning (ERP) is generating keen interest from organizations struggling to effectively manage complex operations. ERP can be defined as a management information system that: (1) is comprised of a single, comprehensive database, (2) accomplishes real-time dissemination of data, and (3) provides for the availability of relevant information to users in the organization where it is most needed. Despite intense practical interest and much descriptive work touting the benefits of ERP, there has been little empirical research as to whether these systems really provide their purported benefits. The purpose of this study is to compare benefits and weaknesses of ERP as experienced by organizations. Approximately five thousand surveys are sent to management accountants employed by a combination of organizations using ERP and organizations not using ERP. Management accountants are deemed to be appropriate subjects for this study because they generally occupy a good vantage point within a company to judge the effectiveness of the organization's management information system.; This study presents a model of an organization's management information system (MIS), which proposes that the effectiveness of a MIS is a function of the benefits and weaknesses of the system. The model defines the benefits of a MIS as six business best practices. ERP is a particular type of a MIS. The best practices include: (1) reconciliation of conflicting goals, (2) standardization of processes, (3) reduction in cost of product, (4) reduction in MIS maintenance cost, (5) better decision-making, and (6) quicker decision-making. The model also defines four possible weaknesses of a MIS—that such systems: (1) are overly complex, (2) are inflexible, (3) promote overly centralized monitoring and control, and (4) require too much time to implement. The above benefits/weaknesses are structured into ten hypotheses. All of the hypotheses posit that there is no difference in the benefits/weaknesses of ERP systems versus Non-ERP systems.; A series of MANOVA/ANOVA procedures are used to observe differences of perception among managerial accountants about ERP. Both between-subjects and within-subjects comparisons are made. The between-subjects analysis is to compare the perceptions of management accountants who work for organizations currently using ERP with the perceptions of management accountants in organizations not using ERP. Also, those management accountants working for organizations currently using ERP are asked to compare the benefits/weaknesses of their current system with the most recent, prior non-ERP system of the organization.; The results of this study indicate that ERP-Users perceive that their systems provide: (1) greater reconciliation of conflicting goals, (2) greater standardization of processes, (3) increased lowering of product costs, (4) quicker decision-making, and (5) better decision-making than do NON-ERP-Users. However, ERP-Users also perceive more complexity in their systems than do NON-ERP-Users; and ERP-Users think that their systems took too long to implement. The overall results of this study indicate that management accountants are seeing improved best practices with MIS that have ERP characteristics.