Enterprise Resources Planning System Usage Impacts Towards Financial Performance, Evidences From Indonesian Stock Exchange

Lianto, Lianto and Basana, Sautma Ronni and Tarigan, Zeplin Jiwa Husada (2009) Enterprise Resources Planning System Usage Impacts Towards Financial Performance, Evidences From Indonesian Stock Exchange. In: ICBMR, 22-24 Nopember 2009, Bali.

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Abstract

Previous researches results suggest various effect of information technology to firms’ performance, some shows reflecting predictions of positive, negative, or nonexistent relationship. Prior research has examined technology Enterprise Resource Planning ERP) and its impact on firm performance. Economic and industrial organization theories provide the basis for the examination of how ERP systems affect firms’ coordination and transaction costs. ERP systems are expected to: (1) reduce costs by improving efficiencies through computerization; (2) enhance decision-making by providing accurate and Timely enterprise-wide information; (3) better communication with customers and suppliers; and (4) Better control over business. From 330 firms enterprises listed in Indonesian Stock Exchange, 35 manufacturing consumer goods will be used as the samples for this research. This research founds, in general, subsequent changes in ERP systems often help resolve or surface implementation issues that affect subsequent use of and success from the use of such systems. Specific findings indicate that ERP adopting firms, which initiate early enhancements in the form of add-ons or upgrades. Differential financial performance in comparison pre implementation of ERP and post implementation evidence from financial performance with indicators are inventory turnover ratio, net profit margin, gross profit margin, operating profit margin, pre-tax margin and cash flow ratio. Keywords: ERP, financial performance, pre and post implementation of ERP

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