The effects of ERP implementations on the profitability of big firms: the case of Spain

Abstract

This paper aims to analyse the incidence of the implementation of ERP systems on the profitability of the biggest Spanish firms. To reach this objective, we sent a questionnaire to a sample of companies. We also gathered the financial statements of these companies. The main results indicate a significant decrement in the profitability of the companies that implemented an ERP system. The reason for this decrement was a reduction in the profit margin, which was caused by an increase in the operational expenses. The results also suggest that adopting firms manipulated earnings to hide the deterioration of their performance. The profitability of non-ERP firms remained unchanged, so the productivity paradox assumption is not supported.

Publication
International Journal on Technology Management, vol. 59, number 1 / 2, 2012
Date