Enterprise resource planning (ERP) benefits survey of Indian manufacturing firms: An empirical analysis of SAP versus Oracle package

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Abstract:

Purpose ‐ The purpose of this study is to examine the tangible and intangible benefits of two enterprises resource planning (ERP) packages namely SAP and Oracle. In particular, the operational benefits (OP), managerial benefits (MB), strategic benefits (SB), information technology (IT) benefits and organizational benefits (OR) of SAP and Oracle packages are scrutinized. Design/methodology/approach ‐ A survey method was employed to elicit opinions from SAP and Oracle ERP professionals. The empirical results are analyzed using smartPLS (Version 2.0) software. The results are further compared and contrasted with that of Deloitte and O'Leary's studies. Findings ‐ Through this study, it seems that the tangible benefits such as procurement cost reduction (32 percent for SAP; 30 percent for Oracle), financial cycle reduction (46 percent for SAP; 48 percent for Oracle), productivity improvements (50 percent for SAP; 41 percent for Oracle), personnel reduction (43 percent for both SAP and Oracle) and IT cost reduction (35 percent for SAP; 21 percent for Oracle) percentages indicate Indian companies have achieved more ERP benefits as compared to Deloitte and O'Leary's studies. Research limitations/implications ‐ Three limitations were identified in this study such as adoption of the survey instrument, potential for response bias associated with targeting packages and the research instrument targeted only for manufacturing organizations. In the future, one can analyze the ERP benefits based on the ERP life cycle stages such as initiation, adoption, adaptation, acceptance, routinization and infusion. Moreover, one can investigate all the benefits mentioned in the literature of Shang and Seddon's study as this study reveals only few tangible and intangible benefits. There is also a possibility of extending the study to the benefits in terms of pre- and post-ERP implementation in manufacturing systems. Finally, introducing some moderators to see the effect on ERP benefits. Practical implications ‐ This paper provides new insights into the tangible and intangible benefits of SAP and Oracle ERP packages. Originality/value ‐ No prior study to the best of one's knowledge has been sought to explain in such benefits of SAP and Oracle ERP packages.

Keywords: Benefits; India; Manufacturing resource planning; Manufacturing systems

Document Type: Research Article

DOI: http://dx.doi.org/10.1108/14637151111136388

Publication date: June 7, 2011

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