Firm and Employee Effects of an Enterprise Information System: Micro-econometric Evidence

Using monthly performance data for stores in a retail chain for over six years and new surveys of managers and employees, we investigate the impact of the adoption of an enterprise resource planning (ERP) system, especially for the time profile of performance changes. Representative findings (depending on specification) are that: (i) sales and inventory turnover initially drop by 7 %, and recover in 6-12 months; (ii) inventory turnover recovers more quickly for establishments that adopt ERP later; (iii) the impact on business performance depends on the way the ERP system is used and, in turn, this reflects the extent and quality of training received by employees and the use of information; (v) HRM practices have little role in the successful implementation of ERP; (vi) employee outcomes, including increased workload, greater job difficulty and enhanced multitasking, vary significantly over time, though the implications for employee welfare are ambiguous.