The Impact of Enterprise Resource Planning Systems on the Efficiency of Taiwanese Firms

Abstract

This paper seeks to ascertain how the turnover factors, vender features and industrial characteristics improve the firm efficiency under enterprise resources planning (ERP) systems. A comparison of DEA efficiency score is conducted between pre-ERP and post-ERP phases based on 59 Taiwanese firms which implement ERP from 1998 to 2003. ERP adopters are found to reduce their turnover days of account receivables or inventories, and prolong turnover days of unpaid accounts permitted by their suppliers, thus causing a substantial efficiency elevation after ERP implementation. In addition, this article captures the greater efficiency advance based upon leading vendor packages. This suggests that the rapid efficiency growth under ERP formula is closely connected with the consulting supports of leading vendors. Furthermore, the electronics industry performs better than non-electronics Industry after ERP installation, which implies "electronics firms' more reliance on such ERP mechanisms" to effectively integrate resources, and as a result enhance performance.