Firm and employee effects of an enterprise information system: Micro-econometric evidence

We investigate the impact of adopting an Enterprise Resource Planning (ERP) system in a retail chain and find interesting parallels between firm and employee outcomes. Concerning performance: (i) sales and inventory turnover initially drop by 7% and recover in 6-12 months; (ii) inventory turnover recovers more quickly for establishments adopting ERP later; and (iii) broader training produces faster sales recovery. Concerning employee outcomes, initially work intensifies, but in time employee outcomes improve. An implication for practitioners is that ERP success is best evaluated only when sufficient time has elapsed after implementation. Employers need to be aware that measures to minimize negative outcomes associated with implementation of enterprise information systems may be needed.