New Fuzzy Dynamic Evaluation For ERP Benefits

Transcription

1 New Fuzzy Dynamic Evaluaion For ERP Benefis Berlin Wu, ( Naional Chengchi Universiy, Taiwan Liping Kao, ( Chihlee Insiue of Business and Technology, Taiwan ABSTRACT The purpose of his paper is o presen a new dynamic approach in he ERP benefis evaluaion. We use essenial financial indicaors o compue he impac of sample eniies which performed ERP implemenaion before March 31, 2003 in China and Taiwan. Differen from he radiional evaluaion mehods, our approach is based on he fuzzy saisical analysis and fuzzy rule based decision suppor sysem. From he field sudy we observe ha boh in China and Taiwan, he ERP implemenaion makes a negaive impac a he firs few years. I is surprising ha mos enerprises don reach he posiive performance as hey expeced. However, he nuance lies in he fac ha wih a he long-erm, Taiwan shows a significan progress, while in China afer ERP implemenaion i sill keeps negaively relaed performance. INTRODUCTION I n recen years, Enerprise Resource Planning (ERP) sysems have been used by many companies due o expecaions of lower operaing coss, shor cycle imes, and higher cusomer saisfacion. For insance, in Taiwan here more han 90 percen of large-scale reailers have inroduced or planned o implemen ERP. In China many enerprises, such as Legend, Ze Jing Elecriciy, and Haier, have invesed huge capial in ERP. ERP advocaes claim ha he posiive benefis of ERP will conribue o firm s increased financial performance and enhanced compeiive siuaion. Bu afer many enerprises noiced advanages and conduced ERP, hey found ha hey go lile even negaive benefi from i. Moreover, huge capial charges, difficul implemenaion, long-erm effors, and slow effecs may diminish he benefis of ERP implemenaion. I has been esimaed ha abou 95% of he enerprises are no successful in helping he improvemen of company finance afer applied he ERP [26]. For example, more han half of Taiwan enerprises hink inducing ERP does no aain opimisic benefi as hey expeced. Some expers even describe he dilemma of ERP as: One-hird Successes, One-hird Fails and One-hird Reforms or Invesing ERP is jus like hrowing billions of dollars ino he ocean. The oher reason of failure of applying ERP comes from he ime lag problem as well as he business cycle. In fac, ERP implemenaions may have lenghy projec windows of 3 o 5 years conribuing o higher coss. I is argued ha a longer ime horizon afer implemenaion analysis is preferred [15, 23, 33]. On he oher hand, in he face of he imporan business projecs, here are many companies perform he ERP are unable o examine is profiable improvemen. The main reason is ha i is no easy o se up an appropriae evaluaion on ERP performance. Since accuraely compuing he ERP performance is sill problemaic, here are many feaures such as economic condiions changing, new poliical policy performing and ransporaion will influence he oucome. However, here are some approaches in deecing or esing procedures for ERP performance evaluaion. Among hem -es or even sudy mehod for evaluaing he performance of ERP are he mosly frequency used [20, 25, 28, 33]. These procedures, alhough easy o implemen, have several disadvanages. The main reason for he decimal cos/benefi comparison comes from ha measuring ERP benefis are no immediaely eviden, bu 89

2 implemenaion coss can be readily idenified ex pos [20]. Moreover, he absence of an explici saisical model for he srucure changes makes i difficul o invesigae saisical properies of he models and o make forecass. In his research we propose a new inegraed esing procedure for ERP performance evaluaion where evaluaion conains a single financial facor effec and a single company s performance evaluaion. Fuzzy rule base abou ERP impac of ime and impac of company size are suggesed for he esing hypohesis of ERP impac. Finally an empirical sudy abou ERP impac on China and Taiwan is illusraed. ERP BENEFITS The Impac Of ERP The ERP is used o subsiue radiional separae sysems wih an inegraed suie of new business model, resuling in a compac flow of informaion hrough he enerprise. ERP provides he same funcionaliies of previous individual sysems while allowing access o enerprise wide informaion by employees hroughou he enire company on a conrolled basis. The major feaures of ERP sofware is he inegraed abiliy among modules, daa soring/rerieving processes, managemen and analysis funcionaliies [1, 22]. Currenly, mos ERP packages (i.e., SAP, Oracle ec) are srucured ino differen modules, including: accouning, human resources, manufacuring, and logisics. Each module is business process-specific, accesses a core/shared daabase, and can be considered a single applicaion from boh a user inerface and sofware srucure poin of view. This srucure enables users o develop module-specific compeencies and vendors o swifly modify sofware srucure wih new release updaes. I is repored from a consuling survey resuls of Forune 500 companies ha he benefis of ERP for cos reducions and revenue improvemens including: invenory and personnel reducion, produciviy and order managemen improvemen, improved informaion, improved processes, and improved cusomer responsiveness. Some ERP benefis are direcly observable and easily measured. For example, conrol invesmens were able o decrease invenory by 50% and increase sales per employee by approximaely 50% due o is ERP implemenaion. Purina Mills [33] was able o reduce he headcoun in is accouning funcion by 3% afer implemenaion of ERP. However, some ERP benefis, such as enhanced cusomer saisfacion, expanded produc configuraions, and improved compeiive posiioning are difficul o observe and measure, paricularly in he shor run. The coss associaed wih ERP implemenaions can be saggering. Implemenaion of ERP requires a subsanial invesmen of ime, money, and inernal resources, and is fraugh wih echnical and business risk. A ypical ERP insallaion has a oal cos of abou $15 million, such as raining, inegraion, esing, conversion, and consuling [17] 1, [29]. The coss of ERP implemenaion can be as high as 2% o 3% of revenues. Insallaion akes beween one and hree years (21 monhs on average). However, once he ERP is online, implemenaion coss are relaively easy o quanify ex pos. Evaluaing ERP Benefis ERP is expeced o help improving adminisraion and profiabiliy of firms. Meanwhile ERP implemenaions do add value o a firm has been exensively debaed in qualiaive discussion or deailed case sudies. There are few lieraures or case repors abou wheher he benefis of ERP implemenaion exceed is coss or risks. The financial burden of implemening ERP can be saggering [7], [32]. While many sudies [6], [12], [27], [31] found informaion echnology associaed wih decreases in worker produciviy, oher evidence provides encouraging resuls of a produciviy payoff. 1 There numbers end o be large because ERP has hisorically been adoped by large firms wih large-scale implemenaion requiremens. However, small and medium-sized enerprises ha are increasingly adoping ERP has much lower implemenaion cos, which will end o push he average cos downward. 90

3 Though many firms mangers argue ha a he beginning sage he impacs such as enhanced cusomer saisfacion, expanded produc configuraions and improved compeiive abiliy can no be disinguished in he shor run, he poenial benefis of ERP sysems are enormous. In he long run hey opimisically belief ha he benefis of ERP implemenaion will urn ou o be posiive in he long run. When people use reurn on Invesmen (ROI) or earning per share (EPS) o evaluae ERP performance, usually hey will ge negaive reurns. For insance, Sedman repors 63 companies wih ERP implemenaion. When asked o balance he quanifiable ERP benefis derived from cos savings and revenue gains agains implemenaion coss, he difference yielded a mean loss of $1.5 million per company [30]. Barua, Kriebel and Mukhopadhysy [3] esed a new process-oriened mehodology for ex pos measuremen on Informaion Technologies impacs. Their resuls showed significan posiive impacs of IT a inermediae level. Brynjolfsson and Hi [11] used firm-level daa on IT spending by 370 large firms. Their resuls indicaed ha IT has increased produciviy and creaed subsanial value for consumers. Appleon e al. [1] indicaes one year afer implemening ERP, Par Indusries in Moiline,Illinois reduced lead-ime, increased on ime delivery performance, decreased work-in progress invenory, and he ime of a shop floor order wen from weeks o hours. Brynjolfsson and Hi [10] find ha firms ha invesed more heavily in business process redesign and devoed more of heir informaion echnology resources o increasing cusomer value (such as, qualiy, imeliness, convenience) had greaer produciviy and business performance. On he oher hand, many organizaions are no cerain ha hey will realize posiive reurns. Even worse, many fail o see immediae benefis from moving o ERP or experience adverse effecs, such as missed sales and profi arges [2]. For insance, Hershey Foods conribued o $150 million in los sales and analyss worried ha Hershey s ERP-relaed problems could resul in a 0.5 percen loss of Unied Saes marke share [13]. Oher lieraure also repored serious business sebacks and delays due o ERP implemenaion roubles [18]. The possibiliy of implemenaion abandonmen is a genuine concern as evidenced by Allied Wase and Wase Managemen [2]. These adverse resuls are no unusual as many firms have announced negaive resuls aribued o heir ERP implemenaion. I is known ha a ime lag is necessary for capuring he performance improvemens from informaion echnology [9]. The employees need ime o coinven hrough heir own experimenaion and discovery, o find ways for he new sysem o suppor heir work [8]. Since he enerprises will experience a delamila sae afer ERP implemenaion [], [16] [23], [33], a longer erm analysis afer ERP implemenaion is preferred. Poson e al. [25] invesigaed he financial impacs of enerprise resource planning implemenaions. They found no significan improvemen for residual income, he raio of selling and adminisraive expenses afer 3 years ERP sysem implemenaion. Furher, here was a significan reducion in he raio of employees o revenues for each of he 3 years examined following he ERP implemenaion. Hi e al. [21] analyze firms ha have purchased licenses for he Sap R/3 sysem from which hey confirm some imporan conjecures abou he business value of ERP implemenaions. They compare he produciviy and business performance of ERP on firms ha adoped ERP wih hose ha did no, and find ha ERP adopers are consisenly higher han non-adopers in performance across a wide variey of measures. Mos of he gains occur during he implemenaion period, alhough hey illusraed some evidence of a decline in business performance and produciviy shorly afer compleion of he implemenaion. Based on he above saemens, we will propose a new approach for deecing he influence of ERP on firm performance wih dynamic financial daa and fuzzy rule base evaluaion echniques. EVALUATING ERP PERFORMANCE Previous Mehods And Facors Analysis Mos researches suppor ha when people increase he compuer/echnology invesmen, i will posiively 91

4 help he firm s adminisraion and benefis, such as lower growh in operaing expense, improved cos efficiency and higher reurn on asses, sales growh and nonproducion labor produciviy [3]. In his research we summarize he essenial facors wih each facor conains 2 feaures for he ERP evaluaion (see [], [5], [8,], [9], [16], [19], [33]): 1. Analysis of operaion (1a) Accouns Receivable Turnover (1b) Invenory urnover; 2. Analysis of profiabiliy (2a) Preax profi o sales (2b) Gross profi raio; 3. Analysis of invesmen reurn (3a) Reurn on oal asses (3b) Reurn on common equiy;. Analysis of growh rae: (a) Sales Growh Rae (b) Gross Profi Growh Rae, as our financial performance evaluaion indicaors, he relaionship of facors and elemens. See Table 1. Table 1 The Relaionship Of Facors And Elemens Facors Feaures Definiion Analysis of operaion Analysis of invesmen reurn Analysis of profiabiliy Analysis of growh rae accoun receivable urnover Invenory urnover reurn on oal asses Earning Ne Revenue averageaccounsreceivable Cos of GoodsSold average invenories Before average Ineres and asses Tax(EBIT) reurn on equiy Earning Before Ineres and Tax(EBIT) average equiy pre-ax income o revenues Pre - ax income revenues gross profi raio Gross profi revenues Sales Growh Rae Sales of Curren period Sales of Base period Sales of Base period Gross Profi Growh Rae Gross Profi of Curren period Gross Profi of Base period Gross Profi of Base period Designs Of Evaluaions Since a long erm evaluaion is necessary for compuing he performance improvemens wih adaping a new sysem. We will use dynamic evaluaion mehod o analyze he ERP implemen. In his sudy we consider he changes in firm performance from 5years before ERP implemenaion, and o 1,2,3, and 5 years afer ERP implemenaion. By observing he financial index wih n companies, we evaluae he ERP performance wih fuzzy logic rule base. In his research, he degree of financial linguisic flucuaion is se o be {plunge (very non-efficien) = [ 1,-0.5], down (non-efficien) = [-0.5, -0.1], unchanged (medium) = [-0.1, 0.1], up (efficien) = (0.1, 0.5), and soar (very efficien) = (0.5, 1). The fundamenal concep in he evaluaion design is ha in order o measure he seady sae behavior afer ERP, we use he median filer ool. I is a robus saisics since lile changes wih cerain facors may come from o noise, while oulier of cerain facors may infec he evaluaion resul if we use he mean filering. The reason we use 1.3 imes and 1,1 imes of median filer as he hreshold values linguisic degree are according o he general experience and human hough. The following procedure demonsraes he evaluaion process. 92

5 Algorihm for a single facor s evaluaion procedure Sep 1: Le n be he number of companies a ime, x ij: be he i h sandardize financial feaure of j h company a he year, i=1,2, m, be he numbers of feaures. J=1,2,. n.. Calculae xij = x ij - x ij0, and Ri median xij. 1 j n Sep 2: Calculaed l( xij) he i h financial linguisic variable of j h company a he year l( x ij ) if if if if if 1.1R i 1.1R 1.3R 1.3R i x i x x x ij i x ij ij ij ij 1.3R 1.3R 1.1R 1.1R i i i i 1 n Sep 3: Calculae xi l( xij ), he financial linguisic value for he average of n company, i=1,2, m. n j 1 Sep : Find x s x m s i =1. i i, he weighed ERP performance of a facor,, where s i is he weigh of he i h feaure, Sep 5: Oupu he resul according o he fuzzy rule base: If 0.5 x, hen he ERP performance of he facor is very efficien up o year. If 0.1 x 0. 5, hen he ERP performance of he facor is efficien up o year. If 0.1 x 0. 1, hen he ERP performance of he facor is no change up o year. If 0.5 x 0. 1, hen he ERP performance of he facor is non- efficien up o year. If x 0. 5, hen he ERP performance of he facor is very non-efficien up o year. Algorihm for macro evaluaion procedure Sep 1: Le X i be he weighed ERP performance of he i h facor, i=1, 2 n, he number of facors. Sep 2: Find he weighed performance of he macro-erp. X n FW X i i, where FWi is he weigh of he i h financial facor, FW i =1. Sep 3: Oupu he resul according o he fuzzy rule base: 93

6 If 0.5 X, hen he macro-erp performance is very efficien up o year. If 0.1 X 0. 5, hen he macro-erp performance is efficien up o year. If 0.1 X 0. 1, hen he macro-erp performance is no change up o year. If 0.5 X 0. 1, hen he macro-erp performance is non- efficien up o year. If X 0. 5, hen he macro-erp performance is very non-efficien up o year. A es of ERP benefi for a financial facor. Sep 1: Le c i : be he i h sandardize financial feaure of a company a he year, i=1,2, m, be he numbers of feaures. Calculae ci = c i - i0 c, and Ri median xij 1 j n. Sep 2: Calculaed l( ci) he i h feaure of linguisic value of a he year 1 if 1.3Ri ci 0.5 if 1.1Ri ci 1.3Ri l( ci ) 0 if 1.1Ri ci 1.1Ri 0.5 if 1.3Ri ci 1.1Ri 1 if ci 1.3Ri n Sep 3: Find c sil ci) feaure, s i =1. (, he weighed ERP performance of a facor,, where s i is he weigh of he i h Sep : Oupu he resul according o he fuzzy rule base: If 0.5 c, hen he ERP performance of he facor is very efficien a year. If 0.1 c 0. 5, hen he ERP performance he facor is efficien a year. If 0.1 c 0. 1, hen he ERP performance he facor is no change a year. If 0.5 c 0. 1, hen he ERP performance he facor is non- efficien a year. If c 0. 5, hen he ERP performance he facor is very non-efficien a year. Fuzzy Weigh Decision For ERP facors In he evaluaion process, people used o reaing each facor wih he equal weigh. Tha is, we assume ha he facors have he same conribuion o he universe domain. However, in order o ge a more accurae evaluaion, we had beer use differen weigh, according o heir conribuions o he objec, for differen facor. Since hen, he macro-performance evaluaion will reflec he real world siuaion. To invesigae he fuzzy weigh of each facor, we may use he fuzzy se heory and sampling survey echnique. Especially, using fuzzy memberships and muliple values assignmen, we can ge an appropriae fuzzy weigh for he objec. Hence, le s give a brief definiion abou fuzzy weigh. 9

7 Definiion: Fuzzy Weigh (Daa Wih Muliple Values) Le U be a finie se (a discussion domain), L { L1, L2,, Lk } be a se of k-linguisic facors on U, m and { 1 m 2 m k FS i i... ik i, i 1,2,..., n} be a sequence of random fuzzy sample on U, mij ( mij 1) L1 L2 Lk j 1 is he membership wih respec o L. Then, he fuzzy weigh was defined as FW 1 n m n L 1 n m n L i1 i2 1 i2 1 n m... n L j k ik. Example: Le he universe se U= {facor 1, facor 2, facor 3, facor }. In a sampling survey wih 7 expers, we ge he following fuzzy sample for facors, see able 2: Table 2 Fuzzy Sample Survey Facor 1 Facor 2 Facor 3 Facor F F F F F F F Toal weigh The fuzzy weigh for facors of he universe se is FW AN EMPIRICAL STUDY The survey sampling is performed boh in Taiwan and China by choosing he companies ha have publicly disclosed ERP implemenaion before March, The daa was assessed from he inerne and he lieraures daa base. The general descripion is demonsraed a able 3. Table 3 Sample Demographics Taiwan China Securiies & Fuures Insiue(Financial Inelligence Bank,SFIB) & Nohing wih his research

8 Financial maerials are no complee Consul over documens Oher sources Toal sample companies Table illusraes he ime afer implemening ERP performed. Since China does no have many companies performed ERP more han afer 5 years, we will concenraed our sudy for he duraion ime 9 years, i.e. before 5 years and afer years performing he ERP. ERP And Firm Performance This sudy empirically examines he influence of ERP echnology on firm performance. We examine four financial facors; operaion, profiabiliy, invesmen reurn and growh rae, each facor has wo feaures, o evaluae he ERP performance. A fuzzy rule base sysem is consruced when we are making a decision rule. Table The Time Afer Implemening ERP Performed Taiwan China Number Percen Number Percen 1 year afer implemening ERP % % 2 year afer implemening ERP 59 9% 29 81% 3 year afer implemening ERP 52 83% 22 61% year afer implemening ERP 70% 16 % Above 5 year afer implemening ERP 30 8% 10 28% Sample size varies due o he non-availabiliy of pos implemenaion daa for all sample firms. Facor 1: Analysis Of Operaion Two financial feaures of operaion are Invenory urnover and Accouns Receivable Turnover. dynamic evaluaion is illusraed a Table 5. The I can be seen ha in China, he dynamic performance of he feaure Invenory urnover x i is no efficien ( x i1 = , x i2 = , x i3 = , x i = ). While he dynamic performance of Accouns Receivable Turnover is efficien afer wo years non-efficiency ( x i1 = x i2 = ). The resul of operaion performance, ERP is no efficien during he firs wo years. Then he performance moves from negaive o posiive, while he change is no so seep, he following years is measure is no significan change wih he financial performance. Table 5 Dynamic Performance Of Operaion Afer ERP Implemenaion Operaion performance T=1 T=2 T=3 T= T=5 Invenory urnover i ) i ) Accouns Receivable Turnover i ) i ) Facor 1:Operaion China( x ) Taiwan( x )

9 1 n 1: xi l( xij), he financial linguisic value for he average of n companies, i=1,2, m. n j 1 m 2: x si xi, he weighed ERP performance of a facor, where s i is he weigh of he i h feaure. As for he case in Taiwan, he performance of he feaure Invenory urnover x i a he hree years is no change ( x i1 = , x i2 = , x i3 = -0.03). Then he performance becomes efficien year afer year. While of Accouns Receivable Turnover becomes efficien afer wo years non-efficien. In general, he operaion performance is no efficien during he firs hree years. Then he performance moves from negaive o posiive and a he fifh year he performance becomes efficien. Facor 2. Analysis Of Profiabiliy Two financial feaures of profiabiliy are Gross profi raio and Preax profi o sales. evaluaion is illusraed a Table 6. The dynamic Table 6 Profiabiliy afer ERP implemenaion Profiabiliy performance T=1 T=2 T=3 T= T=5 Gross profi raio Preax profi o sales Facor 2: Profiabiliy n 1 1: xi l( xij) n j 1 m 2: x si xi i ) i ) i ) i ) China( x ) Taiwan( x ) , he financial linguisic value for he average of n company, i=1,2, m., he weighed ERP performance of a facor, where s i is he weigh of he i h feaure. I can be seen ha in China, afer firs year of ERP implemenaion, he performance of he feaure Gross profi raio x is no change, while i becomes worse afer he succeeding years, he ERP performance is i non-efficien. While he dynamic performance of Preax profi o sales is no change afer wo years non-efficien. The resul of profiabiliy performance of ERP is no change. As for he case in Taiwan, he performance of he feaure Gross profi raio sales a he firs hree years is non-efficien. Then he performance urns ou efficien ( x i = 0.35, x i5 = 0.339) While he Preax profi o sales is worse year afer year. In general, he profiabiliy performance is non-efficien during he firs wo years. Then he performance moves from negaive o posiive, he performance remains unchanged. 97

10 Facor 3. Analysis Of Invesmen Reurn Two financial feaures of invesmen reurn are Reurn on common equiy and Reurn on oal asses. dynamic evaluaion is illusraed a Table 7. The I can be seen ha in China, afer ERP implemenaion, boh of he performance of he feaure Reurn on common equiy and Reurn on oal asses is non-efficien. The resul of invesmen reurn afer he ERP implemenaion is non-efficien. Table 7 Invesmen Reurn Afer ERP Implemenaion Invesmen reurn performance T=1 T=2 T=3 T= T=5 Reurn on common equiy i ) i ) Reurn on oal asses i ) i ) Facor 3: Invesmen reurn China( x ) Taiwan( x ) n 1 1: xi l( xij) n j 1 m 2: x si xi, he financial linguisic value for he average of n company, i=1,2, m., he weighed ERP performance of a facor, where s i is he weigh of he i h feaure. As for he case in Taiwan, afer ERP implemenaion, boh of he performance of he feaure Reurn on common equiy and Reurn on oal asses is non-efficien. The resul of invesmen reurn afer he ERP implemenaion is non-efficien. In general, he invesmen reurn exhibis a negaive benefi boh in China and Taiwan. And here is no inclinaion o change he siuaion Facor. Analysis Of Growh Rae Two financial feaures of growh rae are Sales Growh Rae and Gross Profi Growh Rae. The dynamic evaluaion is illusraed a Table 8. I can be seen ha in China, afer firs year of ERP implemenaion, he performance of boh feaure Sales Growh Rae and Gross Profi Growh Rae are negaive. The dynamic resul of growh rae performance afer ERP implemenaion is from non-efficien o no change. As for he case in Taiwan, he performance of boh feaure Sales Growh Rae and Gross Profi Growh Rae are negaive. While he Gross Profi Growh Rae is worse year afer year. In general, he growh rae performance is non-efficien afer ERP implemenaion. 98

11 Table 8 Growh Rae Afer ERP Implemenaion Growh rae performance T=1 T=2 T=3 T= T=5 Sales Growh Rae i ) i ) Gross Profi Growh Rae i ) i ) Facor: Growh rae China( x ) Taiwan( x ) n 1 1: xi l( xij) n j 1 m 2: x si xi, he financial linguisic value for he average of n company, i=1,2, m., he weighed ERP performance of a facor, where s i is he weigh of he i h feaure. The Macro ERP Performance In his secion we will examine he macro ERP performance via above four financial facors. o he mehod of secion 3.2, we ask for 7 expers opinion, and find he fuzzy weigh is According FW The resuls of macro-erp performance are illusraed a Table 9. I is ineresing o find ha he ERP performance in China exhibis an opimisic progress, from non-efficien o he hird year no change. Though he EPR implemenaion does no mee he expeced achievemen, we may see from he dynamic rend ha as he ime goes by i may ge he posiive benefis. The same siuaion can be found in Taiwan, he macro-erp performance is no change. China Taiwan Table 9 The Resuls Of Macro-ERP Performance T=1 T=2 T=3 T= T=5 Facor 1:Operaion Facor 2: Profiabiliy Facor 3: Invesmen reurn Facor: Growh rae Macro ERP performance Facor 1:Operaion Facor 2: Profiabiliy Facor 3: Invesmen reurn Facor: Growh rae

12 Macro ERP performance n X FWi Xi, where FWi is he weigh of he i h financial facor, FW i =1. CONCLUSION In his research, we propose new dynamic approaches in ERP evaluaion for Taiwan and China ERP implemenaion during 1996 o We use four financial facors wih each facor has wo feaures, o evaluae he ERP performance. The applicaion of he fuzzy rule base o examine he benefi of ERP implemenaion is heurisic. From he single feaure of evaluaion of ERP, we can see ha in China only Accouns Receivable Turnover exhibis posiive improvemen, he ohers are geing worse. While in Taiwan, he Invenory urnover, Accouns Receivable Turnover and Cross profi raios geing beer as he year goes by. As for he impac of he four facors evaluaion of ERP: ERP performance in China, he ERP performance of operaion, he growh rae and he profiabiliy is no change. Bu he invesmen reurn facor becomes worse han afer he ERP implemenaion. While in Taiwan, he bes performance is operaion, i exhibis a posiive rend, from negaive measuremen o posiive. The ERP performances for oher facors are no change. Suggesions o he China side: (1) many enerprises are public; he wesern economic adminisraion sysem is no well consruced. Hence hey may reform heir adminisraion concep, promoe he managemen sysem before hey perform he ERP. (2)ERP emphasis on inegraing he manpower, sales and managemen deparmen ino a complee informaion sysem, only apply he accouning model of ERP can no reach he expeced performance. Suggesions o he Taiwan side: Afer ERP implemenaion, a he firs several years i may be non-efficien or no change, bu in he long run (abou four years) i is going beer. As for he oher financial facors, hough ERP implemenaion makes no change during he shor run, we believe, in long run i will geing beer say afer years. In he sampling survey, owing o he business privacy, many companies as well as he sofware firms would no like o supply he complee informaion, his will make he examinaion work more difficul. Moreover if we can add some non-financial performance indicaors, we will ge a more saisfied answer. REFERENCE 1. E.L. Appleon, How o Survive ERP, Daamaion (March 1997). 2. J. Bailey, Trash Haulers are Taking Fancy Sofware o he Dump, Wall Sree Journal, (1999). A. Barua, C. Kriebel and T. Mukhopadhysy, Informaion Technology and Business Value: an Analyic and Empirical Invesigaion, Informaion Sysems Research 6(1) (1995), pp Benchmarking Parners, ERP s Second Wave: Maximizing he Value of ERP-Enabled Processes, Deloie Consuling Sudy (1998).. D. H. Bender, Financial Impac of Informaion Processing, Journal of Managemen Informaion Sysems 3 (2) (1986), pp A. Bharadwaj, A Resource-Based Perspecive on Informaion Technology Capabiliy and Firm Performance: An Empirical Invesigaion, MIS Quarerly 2 (March 2000), pp H. Brakely, Wha Makes ERP Effecive? Manufacuring Sysems 17(3) (1999), pp T. Bresnahan and S. M. Greensein, The Compeiive Crash in Large Scale Compuing, in The Mosaic of Economic Growh, Eds., Landau, Taylor, and Wrigh, Sanford, (CA: Sanford Universiy Press, 1996). 7. E. Brynjolfsson and L.M. Hi, Compuers and Economic Growh Firm Level Evidence, Unpublished Manuscrip (MIT Sloan School Cambridge, MA, 1993). 8. E. Brynjolfsson and L.M. Hi, Beyond Compuaion: Informaion Technology, Organizaional Transformaion and Business Performance, Journal of Economic Perspecives, 1 () (2000), pp L. M. Hi and E. Brynjolfsson, Produciviy, Business Profiabiliy, and Consumer Surplus: Three Differen Measures of Informaion Technology Value, MIS Quarerly, 20 (2) (1996), pp

13 10. E. Brynjolfsson and S. Yang, Informaion Technology and Produciviy a Review of he Lieraure, Adv Compuer 3 (1996), pp R. Burri, Buyer Bewares, Ausralian CPA 70(8) (2000), pp T. Davenpor, Serving up ERP Value, COI Mag 1 (8) (1998), pp T. Davenpor and J. Shor, In Search of ERP Paybacks, Compuerworld 3 (8) (2000), pp.2 1. Deloie Consuling, ERP s Second Wave Maximizing he Value of Enerprise Applicaions and Processes A Global Research Repor Including Deloie Consuling s Perspecive: Making ERP Spell ROI (1999). 15. C. Escalle, M. Coeleer and R. Ausin, Enerprise Resource Planning (ERP), Harvard Business School case repor no , Boson (1999). 16. K. Girard and M. A. Farmer, Business Sof Firms Sued Over Implemenaion, (November 3, 1999). 17. S. Y. Harris and H.L. Kaz, Organizaional Performance and Informaion Technology Invesmen Inensiy in he Insurance Indusry, Organizaion Science 2(3) (1991) pp D. C. Hayes, J. E. Hunon and J. L. Reck, Marke Reacion o ERP Implemenaion Announcemens, Journal of Informaion Sysems 15(1) (2001), pp L. M. Hi, D. J. Wu, and X. Zhou, Invesmen in Enerprise Resource Planning: Business Impac and Operaion Measures, Journal of Managemen Informaion Sysem 19 (1) (2002), pp T. Hoffman, Exending ERP s Reach, Forune (February 1998), pp E. Knorr, Dawn of he Digial Markeplace, Upside (November 1999), p M.H. Marin, An ERP Sraegy, Forune 2 (February 1998). 23. R. Poson and S. Grabski, Financial Impacs of Enerprise Resource Planning Implemenaions, Inernaional Journal of Accouning Informaion Sysems 2 (2001), pp S. S. Rao, Enerprise Resource Planning: Business Needs and Technologies, Indusrial Managemen & Daa Sysems 100(2) (2000), pp S. S. Roach, Service under Siege-The Resrucuring Imperaive, Harvard Business Review 69(5) (1991), pp J.W. Ross, Surprising Facs abou Implemening ERP, IEEE IT Pro (July/Augus, 1999), pp D. Slaer, The Hidden Coss of Enerprise Sofware, CIO Magazine 11(7) (1998), pp C. Sedman, Survey: ERP Cos more han Measurable ROI, Compuerworld 33 (1) (1999), p P.A. Srassman, The Squandered Compuer; Evaluaing The Business Alignmen of Informaion Technologies, The Informaion Economics Press, New Canaan, CT. (1997). 30. J. Vaughan, Enerprise Applicaions, Sofware Magazine 16 (5) (1996), pp L. Wah, Give EPR a Chance, Managemen Review (May 2000), pp P. Weill, The Relaionship beween Invesmen in Informaion Technology and Firm Performance: A Sudy of he Valve Manufacuring Secor, Informaion Sysems Research 3() (1992), pp

14 NOTES 102