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What is Performance Dip

Handbook of Research on Enterprise Systems
Phenomenon often observed after the implementation of an ERP system whereby the organization adopting the system experiences a decrease in process and/or organizational performance immediately after the live and then increases performance above the initial level several weeks or months after the dip.
Published in Chapter:
ERP-Driven Performance Changes and Process Isomorphism
Andrea Masini (London Business School, UK)
Copyright: © 2009 |Pages: 14
DOI: 10.4018/978-1-59904-859-8.ch008
After observing that the pervasiveness of IT may soon render it strategically irrelevant, management scholars have recently questioned the value of information technology. This chapter challenges the above view, contends that ERP investments may contribute to the achievement of improved business performance, and examines the conditions under which this contribution occurs. The panel analysis of a sample of SAP R/3 adopters provides several insights. First, it suggests that the ERP exerts a generalized positive impact on both productivity and profitability. Second, the results confirm that the widespread diffusion of best practices embedded in the software may limit the ability of firms to use ERP to effectively differentiate from competitors. However, they also suggest that, whilst in the long run the pervasive diffusion of standardized software may decrease its strategic value, in the short run early ERP adopters can profit from a window of opportunity to obtain above average returns.
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