84
ENTERPRISE RESOURCE PLANNING SCORECARDS AND
MANAGERIAL PERFORMANCE
Noorhayati Mansor, University Malaysia Sabah
Asniati Bahar, Accounting Department, Andalas University
Abstract
Shang and Seddon (2002) present a framework for assessing the business benefits of Enterprise
Resource Planning (ERP) systems. Chand et al. (2005) contributes to the study of ERP benefits by
incorporating the balanced scorecard (BSC) framework. The BSC has been reported to improved the
quality of decisions (Valiris, Chytas, and Glykas, 2005; Bremser and Chung, 2005) and enables managers
to make a comprehensive assessment of companies operations (Kaplan and Norton, 1993). Existing work
on the combined ERP system and BSC includes Rosemann and Wiese (1999), Wier, et al., (2007) and
Mansor and Bahari, (2008). An ERP Scorecard was introduced by Chand et. al. (2005) to evaluate the ERP
benefits at different managerial levels. However, their findings are subject to the limitations of case
study methodology. The present paper extends the work of Chand et al. (2005) and proposes an
empirical study to evaluate the perceived ERP benefits at the operational, tactical and strategic levels. A
mix methodology is adopted. The first stage involves semi-structured personal interviews of CEOs to
develop a set of questionnaire. In the second stage, managers of Malaysian manufacturing companies
are randomly selected to respond to the structured questionnaire. The main objective of the study is to
determine the relationship (if any) between ERP benefits and decision levels. The findings of this
research are expected to improve the designs, applications and effectiveness of performance
management system in the strategic information system environment.
Keywords: Strategic Performance Management System; Enterprise Resource Planning (ERP); Balanced
Scorecards (BSC); ERP Scorecard; Strategic Information System (SIS).
85
1. INTRODUCTION
Today's dynamic business environment makes it
crucial for companies to effectively and
efficiently manage their information systems.
Enterprise Resource Planning (ERP) systems
have been used to improve internal operations
and efficiencies and provide sustainable
competitive advantage to organizations
(Lengnick et al. 2004; Genoulaz, 2005 and Hall,
2007). The term ERP represents an integrated
system supported by multi-module application
software. Among the common application
modules include financial and cost accounting,
sales and distribution, materials management,
human resource, production planning and
computer integrated manufacturing, supply
chain, and customer information (Shehab,
Sharp, Supramaniam, and Spedding, 2004).The
ERP systems work in real-time and many of
these systems are now globally integrated, and
operate in multiple languages and currencies.
The ERP system enables company to gain
competitive advantage (Hunton et al., 2003)
and compete effectively in the global market
(Rikhardson and Kraemmergaard, 2006). The
reported benefits of ERP include improved
quality and efficiency of customer service,
production, distribution, managerial decisions,
and costs reductions (Kakouris and
Polychronopoulos, 2005). At present, North
America accounts for 66 percent of the ERP
market while Europe takes 22 percent.
Developing countries, on the other hand, still
lag behind with Asia, for example, represents
only 9 percent of the ERP market. Due to its
potential, Asia and Latin America are becoming
major targets of large ERP vendors (Huang and
Palvia, 2001).
Early studies of ERP systems tend to focus on
the implementation issues of ERP. On the other
hand, current research work focuses on ERP
system as a strategic option to increase
business performance (eg., Rosemann and
Wiese (1999); Chand et al. (2005); and Velcu
(2007)). Focusing on Information Technology
department, Rosemann and Wiese (1999) use a
modified balanced scorecard (BSC) approach to
evaluate the implementation and installation of
ERP software. Chand et. al. (2005) integrate the
traditional four-perspective BSC to study the
effects of ERP systems on the strategic goals. A
major international aircraft engine
manufacturer was used as a case study for this
research and thus, the findings may not be
generalized to other situations. Shang and
Seddon (2002) present a framework for
assessing the business benefits of ERP systems
at different managerial levels.
According to Papalexandris, Ioannou, Prastacos,
and Soderquist (2005), BSC is a management
tool that makes performance transparent to the
whole organization. Studies of companies’
success in adopting the BSC include Hoque dan
James (2000) and Ittner, Larcker and Randall
(2003). The former conducts a survey of
Australian manufacturing companies and
reports improved performance associated with
BSC. The latter carries a survey of financial
services firms in the United States and
documents that the use of BSC is associated
with a higher system satisfaction. Davis and
Albright (2004) conducts a study within the
banking industry and concludes that BSC
adopters outperform non-adopters on key
financial measures. A research conducted in
Finland (Malmi, 2001), and another in Poland
85
(Michalaska, 2005) also support the success of
BSC as a strategy-focus performance tool.
The purpose of this paper is to extend the work
of Chand et al. (2005) combined with the
framework introduced by Shang and Seddon
(2002). The study provides a review of
performance measurements within the ERP
environment of manufacturing companies
where the measurements are focused on
different managerial levels. The study then
proposes an empirical research to evaluate the
perceived ERP benefits corresponding to
different managerial levels. Unlike previous
work in this area, the benefits are grouped
according to operational, tactical and strategic
managerial performance. The remainder of the
paper is organized as follows. Section two
presents the literature review of managerial
information needs and the ERP benefits. Section
three discusses the proposed empirical research
and methodology while the expected results are
presented in section four. Finally, section five
concludes the paper.
2. LITERATURE REVIEW
2.1 Managerial information needs and
Enterprise System
Different managerial levels signify different
responsibilities, challenges, decisions and
information requirements. For example, at the
low or operational level, monitoring daily
activities and output are crucial and the nature
of information is mostly internal, detailed and
frequent. Tactical management, on the hand,
requires information that is more external,
summarized, broader in scope, and need not be
as accurate as the information used by
operational managers. At the strategic
management level, the need to perform long-
term strategic planning requires more external
and broader based information than the first
two levels (Gelinas and Dull, 2008). Appendix 1
and appendix 2 show different responsibilities,
activities and information requirements
according to managerial levels.
Sedera et. al. (2007) concludes that different
employment cohorts (i.e., strategic, technical,
operational) have different views on the success
of Enterprise System (ES). However, the
measurements used to assess the ES benefits
are focused only on system quality, information
quality, individual impact, and organizational
impact. According to Hendricks (2007), a key
benefit of ES is information integration which
can positively affect the performance of
organizations. The integration can replace
software that is functionally oriented and may
not be effectively connected. Thus, information
integration results in costs savings and
improved information response time, business
processes, order management and cycle, and
lower inventory levels (Wang et al., 2006).
Based on qualitative exploratory case studies,
Rikhardson and Kraemmergaard (2006)
document that organizational impact of ES
implementation and use include improvements
in the IT functions, improved IT literacy, better
integration and understanding of accounting
and business processes, financial performance
and competitive position. Shang and Seddon
(2002) provide a comprehensive list of ES
implementation benefits based on stories
published on the web and interviews of
managers of ES adopters (Appendix 3). The list
85
consists of five dimensional levels of benefits:
operational, managerial, strategic,
informational technology (IT) infrastructural,
and organizational. However, the framework of
measurements developed by Shang and Seddon
(2002) do not identify the benefits in term of
customer, internal processes, financial, and
ability to growth perspectives.
2.2 ERP Benefits and Managerial Levels
ERP systems allow for flexibility in language,
currency, and accounting standards while at the
same time reduce operating costs and improve
customer services (Yen, Chou, Chang, 2002).
The systems facilitate information flows and
provide improved data accuracy and
communication in organizations (Gyampah,
2005). Kalakota and Robinson (in Adam &
Sammon, 2004) present four justifications for
managers to invest in ERP systems which are: (i)
improve customer order-processing systems; (ii)
consolidate and integrate crucial business
functions including manufacturing, finance,
distribution, and human resources; (iii) link into
a common denominator a range of broad and
disparate technologies of overall functionality;
and (iv) create a foundation to develop the
next-generation of systems applications.
McAfee (2002) suggests improvements in
throughput, customer response times, and
delivery speeds while Mabert et. al. (2003)
reports the benefit in terms of reduced
operating capital. Using accounting and stock
market-based performance measures, Hitt et.
al. (2002) finds evidence to support improved
financial performance as well.
2.3 ERP Scorecards
Chand et al. (2005) apply the ERP Scorecard as a
tool to assess the impact of ERP on
organizational performance. They suggest an
improved performance management tool called
ERP Scorecard. The tool integrates Kaplan and
Norton’s original Balanced Scorecards (BSC
Scorecards) with the basic goals for using the
information systems which are (i) automate; (ii)
informate, and (iii) transformate. At the first
two levels, the ERP benefits include improved
process efficiency and tactical decision making.
At the final level, the benefits are derived from
capability to meet the needs of existing and
new customers, and to move from content
learning to knowledge learning. According to
them, another area that has impacted the
customer is quality control. Also, better
inventory and supply chain management has
resulted in decreased costs. Simultaneously, the
ability to make accurate commitments to
trading partners and improve turn-around time
has increased the after market business,
thereby resulting in increased revenues.
Rosemann and Wiese (1999) use a modified
balanced scorecard approach to evaluate the
implementation of ERP software and the
continuous operation of the ERP installation.
Along with the four BSC perspectives of
financial, customer, internal processes, and
innovation and learning, they have added a fifth
for the purposes of ERP installation-the project
perspective. The individual project
requirements such as identification of critical
path, milestones, etc. are covered by this fifth
perspective, which represents all the project
management tasks. For financial, they used
compliance with budget as measurement. For
customer perspective, they used coverage of
business processes and reduction of bottleneck.
86
In internal processes, hey look at reduction of
operational problem, availability of the ERP
system, avoidance of operational bottleneck,
improvement in system development, and
avoidance of developer. For innovation and
learning, they suggested using qualification and
independency of consultant. Unfortunately,
Rosemann and Wiese study focused on
evaluating information technology (IT)
department only, and the study was not based
on empirical research result.
2.3.1 ERP Systems Benefits and Customer
Perspectives
According to Mabert et al., (2003), the ERP
systems provide the most benefits in the area
of information availability, inventory
management, customers’ interactions and
information quality. The areas showing least
benefits are costs of information technology
and personnel management. Hsu and Chen
(2004) report customers’ satisfactions increases
with ERP implementation through improved
product quality, order cycle time, response
time, service quality and loyalty.
At the operational level, the ERP systems can be
used to access customer data and inquiries,
reduce order processing errors, and ease
customer order and services. At the tactical
level, the system can improve production
scheduling; increase customer product
demands; improve flexibility of customer
services; expand customer base to other
regions; increase partnership with customers.
At the strategic level, the system can enable e-
business through the web integration
capability; support interactive customer
services; improve product design through
customer direct feedback; expand to new e-
market easily; and build virtual corporation with
virtual supply and demand consortium. The
matrix of benefits classification based on
customer perspective is presented in Appendix
4.
2.3.2 ERP Systems Benefits and Internal
Processes Perspectives
Davenport (1998) suggests that the ERP systems
assist in standardizing and accelerating business
processes. Among others, the systems provide
direct and easy access to essential data,
improve information management and
integrate information systems within the
enterprise. It also increases productivity
through reducing administrative overhead costs
and paper work. In addition, the systems reduce
inventory and inventory obsolescence,
integration with suppliers, and standardize
human resource information. ERP
implementation also improves inventory and
supplier management (Mabert et al., 2003),
production and capacity planning, demand
forecast and manufacturing flexibility (Hsu and
Chen, 2004). Basically, the benefits include
financial performance, customer satisfaction,
improve internal processes, and ability to
growth of a company.
At the operational level, ERP adoption reduces
error in production processing, purchasing lead
time, customer service-time, processing of
employee administration, and improve the
speed to information access. At the tactical
level, the system can be used to: improve
decision quality; improve the frequency of staff
monitoring; improve asset management;
improve production management; and improve
workforce management. At the strategic level,
the system can be used to: build external
linkages with related business parties easily;
adapt to technology changes easily; support
87
business growth in competition; support
business growth in capability; support business
growth with new products; support business
growth with increasing numbers of employees;
support business growth in new markets; and
enable worldwide expansion with centralized
world operation.
2.3.3 ERP Systems Benefits and Innovation
Perspectives
Organizational impacts of ERP system
implementation include improved IT function,
coordination and integration of business
processes and competitive position (Rikhardson
and Kraemmergaard, 2006). The ERP
implementation improves personnel
management (Mabert et al., 2006). Wang et al.
(2006) reports that group cohesiveness
increases goals achievement and according to
Hsu and Chen (2004), communication among
department also improves. In addition, Spathis
and Ananiadis (2005) found that ERP
implementation can improve document
circulation and communication between
employees and management. By increasing
employees’ participations, the company can
develop its growth potential. The actual use of
ERP and online procurement is positively
correlated with labor productivity growth (Falk,
2005). Gupta and Kohli (2006) suggest that
active participation from senior-level managers
from various functional areas contributes to
successful ERP implementation.
2.3.4 ERP Systems Benefits and Financial
Perspectives
Poston and Grabski (2001) investigate the effect
of ERP adoption on profitability. Their study
provides evidence of a reduction in the ratio of
cost of goods sold to revenues and the ratio of
employees to revenues due to ERP system
implementation. Hunton et. Al. (2003)
document improved values of return on assets
(ROA), return on investment (ROI), and asset
turnover (ATO) over a 3-year period for
adopters, as compared to non-adopters.
Nicolaou and Bahattacharya (2006) also used
financial performance to measure ERP system
adoption successful and report superior
performance among ERP adopters. Hendricks et
al. (2006) provides evidence to suggest that ERP
adopters show an improvement in ROA. Overall,
the evidence of their research suggests that
although firms that invest in ERP systems do not
experience a statistically significant increase in
stock returns, there is some evidence to suggest
that profitability improves over the combined
implementation and post-implementation
periods.
Rikhardson and Krammergaard (2006) study the
impact of enterprise system implementation
using interviews and cases. They separate the
financial impact of ES implementation into
revenue effects and cost effects. They report
that identifying the impact of the former is
more challenging than the latter. The reasons
for reduced inventory costs are associated with
better planning, coordination with suppliers and
customers, integration between purchasing,
productions and sales and shorter order cycle
times. According to Hunton et. al. (2003), large
companies show improvement in financial
measures whereas smaller companies
experience better performance in
manufacturing and logistics.
Based on the above research findings, it is
concluded that ERP system implementation can
improve company’s financial performance. At
the operational level, the system can reduce
88
administrative cost; remove redundant
processes; reduce inventory-carrying cost; and
lower labor cost. At the tactical level, the
system can conduct better forecasting; improve
profit and cost control; increase market share;
increase financial control; and increase equity
capitalization. At the strategic level, the system
can increase new markets, enable worldwide
expansion and build cost leadership by
increasing processes efficiency.
3. METHODOLOGY AND THE PROPOSED STUDY
The comprehensive review of the literature for
the present study involves a research period of
2006 to 2008. It covers a wide range of sources
including journals, conference proceedings,
doctoral dissertations, textbooks and also
online publications. The search was based on
descriptors “enterprise resource planning
implementation” and “benefits”.
The initial search yielded more than 850
publications on ERP implementation and
benefits, mostly focusing on the critical success
factors. Additional articles were identified
trough a manual search of the references in the
articles that were initially selected. Finally, 47
articles on studies conducted in various regions
and countries were identified. For each article,
the benefits were classified based on
management’s level proposed by Shang and
Seddon (2002), and the four performance
measurement’s perspectives introduced by
Kaplan (1993). The benefits of ERP adoption
were also identified and classified using ERP
Scorecards matrix proposed by Chand et al.
(2005).
The final sample of this review consists of 47
articles. To be included in the final sample, the
full text of each article was reviewed. This is to
ensure that the study meets the following
selection criteria:
i. Empirical studies published in English
either quantitative or qualitative
approach. The study must provide explicit
description of where the research was
conducted and how the benefits for ERP
implementation were experienced;
ii. In the case where conference
proceedings with the same sources and
results were published in more than one
different volume, only the one with the
more detailed contents was included in
order to avoid duplication; and
iii. Whenever a journal article was based on
earlier version published as conference
proceedings, the earlier version was
excluded to ensure the highest quality of
research.
Following the documented benefits of ERP
adoption, a new extension study is proposed to
examine the benefits of ERP corresponding to
different managerial levels. A survey
questionnaire will be developed focusing on the
manufacturing industry in Malaysia. The
measurements of the expected benefits will be
adopted mainly from the findings of the
reviewed studies and a summary of benefits for
the proposed research is presented in Appendix
4. More specifically, the proposed new study is
designed to answer the following research
questions:
85
i. Do Malaysian manufacturing companies
experience similar benefits due to ERP
system adoption?
ii. Is the integration of ERP and BSC
performance management system
generally practiced by Malaysian
manufacturing companies?
iii. Is there significant difference in the
benefits achieved when compare the ERP
system with the integrated ERP and BSC
system of performance managemant
among the Malaysian manufacturing
companies?
iv. Do the benefits of ERP adoption based on
the BSC perspectives differ according to
specific managerial decision levels?
The following framework is proposed for the
future research:
4. EXPECTED RESULTS
ERP systems provide the means by which
organizations develop competitive edge to
improve performance and thus, survival. The
proposed new study applies the comprehensive
benefits associated with the integrated ERP
system in a survey to be conducted among
manufacturing companies. Positive outcome is
anticipated for each of the research questions
based on the following:
i. As Malaysian manufacturing sector
grows in capacity and product diversity, it
is reasonable to expect wide application
of the system in performance
management;
ii. This expectation increases especially
with relatively new or recently
reengineered manufacturers since these
companies are more likely to utilize the
latest information technology system in
their operations;
iii. The widespread evidence of the BSC
framework in improving organizations
performance provide signals of positive
net contribution to its adopters and thus,
should motivate Malaysian
manufacturers to integrate the ERP
system with the BSC perspectives; and
iv. The complexity and nature of business
decisions increase with the level of
ERP system Benefits
Strategic Level Benefits
Tactical Level Benefits
Operational
Level Benefits
Business Performance
Internal Processes
Perspectives
Customer
Perspectives
Innovation Perspectives
Financial Perspectives
85
managers in the organizational hierarchy.
The highest or strategic level requires
information that is more long-term in
perspective and less detail in nature than
the operational level. Thus, high
integration of information system is seen
as more advantageous for the purpose of
handling strategic managerial issues.
5. CONCLUSION
One of the greatest benefits of the ERP system
is the integration of processes, data and
organizational elements. The integration unites
all major business processes from order
processing to product distribution within a
single family of software modules. In today's
knowledge economy, ERP systems along with
other technological advances such as E-
commerce play significant roles to ensure
sustainable business. They assist companies to
align managerial performance with the strategic
plan. Intense global competition, reduce
duration of product life cycle, and constant
changes in business landscape require
companies to demand integrated information
system for decision making.
This paper provides a comprehensive literature
review of the ERP systems benefits. It also
discusses the integrated ERP and the BSC
perspectives of performance management.
Using benefits identified by previous
researchers and combination of framework
introduced by Shang and Seddon (2002) and
Chand et al. (2005), a new empirical study is
proposed which will examine the benefits
further by focusing on different levels of
management. The Malaysian manufacturing
sector represents the chosen population and a
survey questionnaire will be designed to
address the research questions for the study.
It is expected that the proposed study will
provide evidence in support of the existing
research findings on the ERP systems adoption.
In particular, the ERP system implementation by
Malaysian manufactures are predicted to result
in increase managerial benefits which differ
according to decision making levels. At the
operational level, evidence suggests association
between the system and improved user
involvement in training, productivity per
employee, customer service level and
accessability of enterprise information. At the
tactical level, the benefits of the system are
associated with increase decision making skills;
support employees’ speed of reaction;
management processes efficiency and
knowledge. Finally, at the strategic level, the
integrated ERP systems are predicted provide
benefits in terms of building new process chain,
market, product lines and customers’ loyalty to
assist companies in achieving long-term
business success.
85
REFERENCES
Adam, F., and Sammon, D., (2004), The Enterprise
Resource Planning Decade: Lesson Learned and
Issues for the Future, Idea Group Publishing.
Bateman, T.S. and Snell, S.A., 1997, Management: Building
Competitive Advantage, 4th edition, McGraw Hill.
Bremser, W.G., and Chung, Q B., (2005), A Framework for
performance measurement in the e-business
environment, Electronic Commerce Research and
Applications, 4, 395-412.
Chand, D., Hachey, G., Hunton, J., Owhoso, V., and
Vasudevan, S., (2005), A balanced scorecard based
framework for assessing the strategic impacts of
ERP systems, Computers in Industry, 56, 558-572.
Davenport, T.H. (1998), Putting the enterprise into the
enterprise system, Harvard Business Review, 76 (4),
pp 121-131.
Davis, S., and Albright, T., (2004), An investigation of the
effect on balanced scorecard implementation on
financial performance, Management Accounting
Research, 15, 135-153.
Falk, Martin, (2005), ICT-linked firm reorganization and
productivity gains, Technovation (25), pp 1229-
1250.
Gelinas, U..J. and Dull, R.B., 2008, Accounting Information
Systems, 7 ed, South Western.
Genoulaz VB., Millet PA., and Grabot B., (2005), A survey
on the recent research literature on ERP systems,
Computers in Industry, 56, 510-522.
Gupta M and Kohli A, (2006), Enterprise resource planning
systems and its implications for operations
function, Technovation, 26, 687-696.
Gyampah, KA, (2005), Perceived usefulness, user
involvement, and behavioral intention: an
empirical study of ERP implementation, computers
in Human Behavior, 23, 1232-1248.
Hall, James, (2007), Accounting Information Systems, 5th
edition, Thomson, South Western.
Hendricks, KB., Singhal, VR., and Stratman, JK., (2007), The
impact of enterprise systems on corporate
performance: A study of ERP, SCM, and CRM
system implementations, Journal of Operation
Management 25 (1), pp 65-82.
Hitt, L.M., D.J. Wu and X. Zhou, (2002), Investment in
Enterprise Resources Planning, Journal of
Management Information Systems 19, pp. 71–98.
Hoque, Z. and James, W., (2000), Linking Size and Market
Factors to Balanced Scorecards: Impact on
Organizational Performance. Journal of
Management Accounting Research 12, pp. 1–17.
Hsu L and Chen M, (2004), Impacts of ERP systems on the
integrated-interaction performance of
manufacturing and marketing, Industrial
Management and & Data Systems, 104 (1), pp 42-
55.
Huang Z and Palvia P, (2001), ERP implementation issues in
advanced and developing countries, Business
Process Management, 7 (3), 276-284.
Hunton, JE., Lippincott, B., and Reck, JL., (2003), Enterprise
resource planning systems: comparing firm
performance of adopters and nonadopters,
International Journal of Accounting Information
System, 4, 165-184.
Ittner, CD., Larcker DF., and Randall, T., (2003),
Performance implications of strategic performance
mesurement in financial service firms, Accounting,
Organizations and Society, 28, 715-741.
Kakouris AP and Polychronopoulios, (2005), Enterprise
Resource Planning (ERP) system: An Effective
Tool for Production Management, Management
Research News, 28 (6), 66-78.
Kaplan,R.S., and Norton, D.P., (1993), Putting the balanced
scorecard to work, Harvard Business Review,
September-October 1993, 134-147.
Lengnick-Hall CA., Lengnick_Hall ML., and Abdinnour-
Helm S, (2004), The role of social and intellectual
capital in achieving competitive advantage
through enterprise resource planning (ERP)
systems, Journal of engineering and Technology
Management , 21 (4), 307-330.
Mabert VA, Soni A, Venkataramanan MA, (2003), The
impact of organization size on enterprise
resource planning (ERP) implementations in the
US manufacturing sector, The Internatinal
Journal of Management Science, 31, 235-246.
Malmi, Teemu, (2001), Balanced scorecards in Finnish
companies: A research note, Management
Accounting Research, 12, 207-220.
Mansor, N. and Bahari, A., 2008, A Strategy-Based Key
Performance Indicators and Company’s
Performance: The Experience of Government-
Linked Companies in Malaysian”, The
International Journal of Knowledge, Culture and
Change Management, Volume 8, No. 2, 2008, pp
93-103.
85
Mansor, N. and Bahari, A., 2008, Integrating Enterprise
Resource Planning System and the Balanced
Scorecard in Performance Management”:
Proceeding of the International Conference on
Business Globalization in the 21st Century, 21-22
April 2008, University of Bahrain Pres (082961-
2008), 2008.
McAfee, 2002 A. McAfee, The impact of enterprise
information technology adoption on operational
performance: an empirical investigation,
Production and Operations Management 11
(2002) (1), pp. 33–53.
Michalaska, J., (2005), The usage of the balanced
scorecard for the estimation of the enterprise’s
effectiveness, Journal of Purchasing Technology,
751-758.
Nicolou, AI., and Bhattacharya, S., (2006), Organizational
performance effects of ERP systems usage: The
impact of post implementation changes,
International journal of Accounting Information
Systems, Elsevier.
Papalexandris, A., Ioannou, G., Prastacos, G., and
Soderquist, KE., (2005), An integrated
methodology for putting the balanced scorecard
into action, European Management Journal, 23
(2), 214-227.
Poston, R., Grabski, S., (2001), Financial impacts of
enterprise resource planning implementations,
International Journal of Accounting, 2, 271-294.
Rikhardson, P. and Kraemmergaard, P., (2006), Identifying
the impacts of enterprise system
implementation and use: Examples from
Denmark, International journal of Accounting
Information Systems, xx (2006) xxx-xxx.
Roseman and Weise (1999), Measuring the Performance
of ERP Software- a Balanced Scored Approach,
Proceedings of the 19th Australian Conference on
Information Systems.
http://www2.vuw.ac.nz/acis99/Papers/PaperRos
emannWiese-089.pdf.
Sedera, Darshana and Tan, Felix and Dey, Sharmistha
(2007) Identifying and Evaluating the Importance
of Multiple Stakeholders Perspective in
Measuring ES-Success. In Proceedings European
Conference on Information Systems, Gothenburg,
Sweden.
Shang, S. and Seddon, P.B., (2002), Assessing and
Managing the Benefits of Enterprise System: The
Business Manager Perspectives, Information
System Journal 12, pp 271-299.
Shehab, EM., Sharp, MW., Supramaniam, L., and Spedding,
TA., (2004), Enterprise resource planning: An
integrative review, Business Process
Management, 10 (4), 359-386.
Spathis, C., and Anadiadis, J., (2005), Assessing the
benefits of using an enterprise system in
accounting information and management, The
Journal of Enterprise Information Management,
18 (2), 195-210.
Valiris, G., Chytas P., and Glykas, M., (2005), Making
decisions using the balanced scorecard and the
simple multi-attribute rating technique,
Performance Measurement and Metrics, 6 (3),
159-171.
Velcu, O., 2007, Exploring the effects of ERP systems on
organizational performance – evidence from
Finnish companies, Journal of industrial
Management and Data Systems, Vol. 107, No. 9,
pp 1316-1334.
Wang, ETG., and Chen JHF., (2006), The influence of
governable equilibrium on ERP project success,
Decision Support Sytems, 41, 708-727.
Wang, ETG., Ying, TC., Jiang, JJ., and Klein, G., (2006),
Group cohesion in organizational innovation: An
empirical examination of ERP implementation,
Information and Software technology, 48, 235-244.
Wier, b., Hunton, J., and HassabElnaby, H.R., (2007),
Enterprise Resource Planning Systems and Non-
financial Performance Incentives: The Joint Impact
on Corporate Performance, International Journal of
Accounting Informations Systems, doi:
10.1016/j.accinf.2007.05.001.
Yen, DC., Chou, DC., Chang J., (2002) A synergic for web-
based enterprise resources planning systems,
Computer Standards & Interface, 24, 337-346.
85
Appendix 1: Managerial Levels, Responsibility, Value and Key Activities
Operational managers Tactical managers Strategic managers
Responsibility Supervise the
operation of the
organization
Translating the general
goals and plans developed
by strategic managers into
more specific objectives and
activities
Focus on long term issues
and emphasize the
survival, growth, and
overall effectives of the
organization.
Primary value Driving business
performance by
focusing on
productivity,
innovation and growth
within frontline units
Providing the support and
coordination to bring large
company advantage to the
independent frontline units
Creating and embedding
a sense of direction,
commitment and
challenge to people
throughout the
organization
Key activities Creating and
pursuing new
growth
opportunities for
the business
Attracting and
developing
resources and
competencies
Managing
continuous
performance
improvement within
the unit
Developing individuals
and supporting their
activities
Linking dispersed
knowledge, skills, and
best practices across units
Managing the tension
between short-term
performance and long-
term ambition
Challenging embedded
assumption while
establishing a
stretching opportunity
horizon and
performance
standards
Institutionalizing a set
of norms and values to
support cooperation
and trust
Creating an
overarching corporate
purpose and ambition
Adapted from: Bateman, T.S. and Snell, S.A., 1997, Management: Building Competitive Advantage, 4th
edition, McGraw Hill, pg. 13.
Appendix 2: Management Levels and Information Requirements
Managerial
Level
Decision’s
Structure
Information requirements
Strategic
management
Unstructured
Undefined
External
Summarized
Future
Infrequent
Less
accuracy
86
Tactical
Management
Structured
Well
defined
Internal
Detailed
Historical
Frequent
More
accuracy
Operations
management
Adpated from: Gelinas, U..J. and Dull, R.B., , 2008, Accounting Information Systems, South-Western, 7th
Edition, pp.24.
87
Appendix 3: Five Dimensional Levels of ERP Benefits
Dimensions Sub dimensions
1. Operational 1.1 Cost reduction,
1.2 Cycle time reduction,
1.3 Productivity improvement,
1.4 Quality improvement,
1.5 Customer services improvement
2. Managerial 2.1 Better resource management,
2.2 Improved decision making and planning
2.3 Performance improvement
3. Strategic 3.1 Support business growth
3.2 Support business alliance
3.3 Build business innovations
3.4 Build cost leadership
3.5 Generate product differentiation (including customization)
3.6 Build external linkages (customers and suppliers)
4. IT Infra-structure 4.1 build business flexibility for current and future changes
4.2 IT costs reduction
4.3 Increased IT infrastructure capability
5. Organizational 5.1 Support organizational changes
5.2 Facilitate Business learning
5.3 Empowerment
5.4 Built common visions
Source: Shang and Sheddon (2002)
88
Appendix 4: A Summary of Proposed Benefits of Enterprise Resource Planning Scorecards and
Managerial Performance According to the BSC Perspectives.
Customer Internal Process Innovation Finance
Operational Access customer
data and
customer inquiries
easily
Improve customer
response time
Reduce customer
complaints
Reduce customer
processing errors
Ease customer
order and service
Improve customer
satisfaction
Reduce error in production
processing
Reduce time to purchase
from supplier
Reduce time to serve
customer
Reduce time to process
employees administration
Improve data accuracy and
reliability
Improve work scheduling
Improve the speed to
information access
Increase user
involvement in
training
Increase
products
produced per
employee
Increase
customer served
per employee
Increase
accessability of
enterprise
information
Reduce
administrative cost
Remove redundant
processes
Reduce inventory-
carrying cost
Lower labor cost
Tactical Improve
production
scheduling
Increase customer
product demands
Improve flexibility
of customer
services
Expand customer
base to other
regions
Increase
partnership with
customers
Improve decision quality
Improve the frequency of
staff monitoring
Improve asset
management
Improve production
management
Improve workforce
management
Increase
decision making
skills
Support worker
ability for taking
action quickly
Support
management
processes
efficiency
Increase
manager
knowledge
Conduct better
forecasting
Improve profit and
cost control
Increase market
share
Increase financial
control
Increase equity
capitalization
Strategic Enable e-business
through the web
integration
capability
Support interactive
customer services
Improve product
design through
customer direct
feedback
Expand to new e-
market easily
Build virtual
corporation with
virtual supply and
demand consortium
Build external linkages with
related business parties
easily
Adapt to technology
changes easily
Support business growth in
competition
Support business growth in
capability
Support business growth
with new products
Support business growth
with increasing numbers
of employees
Support business growth in
new markets
Enable worldwide
expansion with centralized
Build new
process chain
Build new
market strategy
Create new
business lines
Customize
product or
services
Provide lean
production
Increase new
markets
Enable worldwide
expansion with
global resource
management.
Enable worldwide
expansion with
foreign currency
capability
Enable worldwide
expansion with
global market
penetration
Enable worldwide
expansion by
deploying solution
quickly
Build cost
89
world operation
leadership by
increasing
processes
efficiency
Business
Performance
Quality of customer
service
Quality of products
Gain competitive
advantage
On-time delivery
Increased customer
partnership
Efficiency ratio
Complaints amount
Production ratio Failure
amount
Reduced cycle time
Reduced employee turn
over
Training amount
Empowerment
Better employee
morale
Development of
workers’
qualification
Return on
investment
Return on assets
Operating profits
Sales growth rate
Cost reduction
Economic Value
Added