Effect of business characteristics and ERP implementation on business outcomes

Abstract

Purpose – This study is an exploratory study aiming to explore whether different groups of manufacturing firms with similar business characteristics and enterprise resource planning (ERP) implementation approaches would experience different business outcomes from ERP implementation. The paper aims to discuss these issues. Design/methodology/approach – Cluster analysis with data collected from 256 Korean manufacturing firms was employed to identify groups of manufacturing companies having similar business characteristics and adopting similar ERP implementation approaches. Then, the differences in business outcomes from implementing ERP systems among these groups of companies were examined. Findings – Company size and production approaches are useful variables for grouping manufacturing firms into clusters of companies with similar characteristics. Additionally, large manufacturing firms with make-to-order production approach have significantly higher perceived benefits from implementing ERP systems regarding external coordination and competitive impact than other firms do. Research limitations/implications – This study was conducted in only one industry of one country and used the data collected by self-reporting instrument. Thus, further studies conducted in other industries and/or other countries and using more objective measures would allow more generalizability of the findings of this study. It would also be interesting to investigate the effects of the logistics practices adopted by small manufacturing firms even though these practices may be more suitable for large manufacturing firms. Originality/value – This study contributes to the literatures on benefits obtained from implementing ERP systems as none of the previous studies has focused on the relationship among business characteristics, ERP implementation approaches, and business outcomes from ERP implementation.