Operating performance of Chinese manufacturers in the wake of ERP implementation

This paper develops a model of firm operational performance in the aftermath of an ERP implementation based upon subjects’ perceptions. 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 analysed their ERP implementations and post-implementation operational performances. We use subjects’ perceptions to model firm operational performance as a function of effective business process improvement (BPI) that is related to effective ERP implementation and post-implementation systems integration. These intervening factors, in turn, are modelled as 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 BPI, which is positively related to perceived ERP effectiveness Operating performance of Chinese manufacturers 297 and post-implementation systems integration, and that these are positively related to both the level of CEO involvement and the extent of BPR. Finally, competition and organisational change factors, along with ERP intensity variables are found to be effective controls in the underlying conceptual model.