TITLE

A HISTORICAL LOOK AT THE EFFECTS OF ENTERPRISE SOLUTIONS ON PROFITABILITY AND INTERNATIONALIZATION

AUTHOR(S)
Nay, Douglas; Ogden, James R. (Doc); Ogden, Denise T.
PUB. DATE
September 2008
SOURCE
Review of Business Research;2008, Vol. 8 Issue 4, p174
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
A study was conducted to determine possible effects of enterprisewide software on two main aspects of modern business, profitability and globalization. It proposes five hypotheses, that use of enterprisewide software in at least two modules or functions will result in: (1) increased profitability as measured by net income, (2) increased globalization as measured by the Sullivan Model, (3) a heightened view by top management of information technology as a strategic resource, and (4) increased centralization of technology decisions. The final hypothesis is that businesses previously implementing either Business Process Reengineering (BPR) or Total Quality Management (TQM) will have a shorter, less expensive implementation period for an ES. We examined the performance of 72 Fortune 500 companies that had used enterprisewide software (ES) for five years, with a control group of thirty. Hypothesis 1 (increased profitability), Hypothesis 2 (increased internationalization), and Hypothesis 5 (implementation made easier by BPR and TQM) were not supported. Profitability measured in five different ways both two years and four years after implementation did not show statistical significance. Hypotheses 3 and 5 (perception of ES as a strategic resource and centralization of decisions) were supported.
ACCESSION #
35601381

 

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