1 ERP Systems Business Value: A Critical Review of Empirical Literature Michailidou Fotini, Sergi Anthi-Maria, Loukis Euripidis University of the Aegean, Department of Information and Communication Systems Engineering, Karlovassi, 83200, Samos Abstract: The business value generated by information and communication technologies (ICT) has been for long time a major research topic of high interest to both researchers and practitioners. Recently there is a growing research interest in the business value generated by particular types of information systems (IS). One of them is the Enterprise Resource Planning (ERP) systems, which are increasingly adopted by organizations for supporting and integrating key business and management processes within and beyond their boundaries. The current paper initially presents a critical review of the existing empirical literature concerning the business value of the ERP systems, which investigates the impact of ERP systems adoption on various measures of organizational performance. Then is critically reviewed the literature concerning the related topic of critical success factors (CSFs) in ERP systems implementation, which aims at identifying and investigating factors that result in more successful ERP systems implementation that generate higher levels of value for organizations. Finally, based on the conclusions of the above literature reviews, future directions of research concerning ERP systems business value are proposed. Index Terms— Enterprise Resource Planning (ERP), Business Value, Critical Success Factor (CSF), Business Performance. I. INTRODUCTION Organizations have been making for more than two decades big investments in information and communication technologies (ICT) aiming at the development of various types of information systems (IS) that support important business functions and processes of them. So a critical issue that is posed to both researchers and practitioners is to understand and assess the business value generated by these ICT investments and to find ways of increasing it. For this reason the business value generated by ICT has been for long time a major research topic. This ICT business value research can divided into four periods. In the first period (from the mid 1980s until the mid 1990s) there has been very little empirical evidence of a positive association between ICT investment and business performance (Roach 1987, Brynjolfsson 1993, Strassman 1997); these counter-intuitive results lead to extensive debates about this ‘ICT Productivity Paradox’ (Brynjolfsson 1993) and the basic reasons behind it. In the second period (from the mid 1990s until the mid 2000s) there have been mixed results: some studies provided empirical evidence of positive contribution of ICT investment to some business performance measures (Brynjolfsson and Hitt 1996, Stolarick 1999, OECD 2004, Arvanitis 2005), even though there are still some other studies resulting in mixed or inconclusive results. In the third period (from 2000 until today) research focuses on the identification and deeper understanding of ‘internal’ factors (related to the internal functions of the organization), which can increase the business value generated by ICT, such as business process redesign, new human skills, innovations, ‘soft ICT investment’, etc. (Devaraj & Kohli 2000, Arvanitis 2005, Hempell 2005, Loukis et al 2008a). Finally in the fourth period (from 2005 until today) research starts dealing with the effect of ‘external’ factors, which are related to the external environment of the organization, such as generalized competition, strategy, industry concentration, industry dynamism, etc. on ICT business value (Melville et al 2007, Loukis et al 2008b). Recently there is a growing research interest in the business value generated by particular types of (IS), such as e-business systems (Zhu 2004, Zhu & Kraemer 2005, Soto-Acosta & Merono-Cerdan 2008), Enterprise Resource Planning (ERP) systems (Poston and Grabski 2001, Hunton et al 2003, Nicolaou 2004, Hendricks et al. 2006), etc. The current paper presents a critical review of the existing empirical literature concerning the business value generated by the ERP systems, which investigates the impact of ERP systems adoption on various measures of organizational performance. EPR systems are increasingly adopted in the last decade by organizations for supporting and integrating key business and management processes within and beyond their boundaries. According to Holland et al. (1999) ERP systems are defined as highly integrated enterprise-wide standard IS (software packages) that automate core corporate activities (business processes) such as finance, human resources, manufacturing, supply and distribution. Nah et al. (2001) define an ERP system as a packaged business software system that enables a company to manage the efficient and effective use of its resources (materials, human resources, finance, etc.) by supporting a process-oriented view of the business and providing a total, integrated solution for the organization’s information-processing needs. The basic goal of an ERP is to support and integrate all business functions, processes and units of an organization and to create a system that is capable of providing up – to – date and relevant information to the decision makers, the employees and also the business partners. However, ERP —————————