Technological Change Perspective for ERP Implementation in Small and Medium Enterprises

Technological Change Perspective for ERP Implementation in Small and Medium Enterprises

Jessy Nair (Faculty of Management Studies, PES University, Bangalore, India) and Aarthy Chellasamy (Faculty of Management Studies, PES University, Bangalore, India)
DOI: 10.4018/IJSITA.2017040103

Abstract

Small and medium-sized enterprises (SMEs) trail large organizations in leveraging IT systems. SMEs are beginning to understand the significance of implementing IT systems like ERP for improving their preparedness in business processes. Hence the objective of this research article is to develop a framework to analyse SME's organizational preparedness for implementing the technology. This research applies a General Morphological Analysis (GMA) framework to explore suitable models and variables for IT change preparedness to realize the benefits of ERP implementation in SMEs. An SMEs drawback in implementing IT tools is specifically due to a lack of knowledge and an acute shortage of resources like investment and manpower. The review of literature in this article using general morphological analysis is novel for ERP implementation in the SME sector. Based on the review of articles, a morphology with a technology organization framework and environment (TOE) framework which evaluates technological, organizational and environment is most adequate to understand the IT readiness for ERP among SMEs.
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Introduction

In recent times Information Technology (IT) has become a vital component for organizational preparedness in the business environment. The volatile pace technologies are growing at, it makes it essential to facilitate organizations in implementing strategic IT systems since they are determinants of organizational effectiveness and competitiveness (Singh, 1993). One such transformation that requires special mention is an Information Technology (IT) component, Enterprise Resource Planning (ERP) system. ERP, a software commodity, is an enabler of such a change from functional to process enterprises by way of seamless information flow to stakeholders across the organization. In the 1990s ERP systems became the “de-facto standard” (Parr & Shanks, 2000) for replacing legacy systems in large organizations (Ross, 1998; Robey, Ross & Boudreau, 2000). ERP systems are organized around the basic economic rationale of enterprise value chain. They are designed around a process view of the business. The major advantage of ERP over application software suites is that the enterprise wide applications promise seamless integration of information flowing through the company: accounting and financial information, human resource information, supply chain information and customer information. However, the most crucial factor in the whole system of ERP is the implementation aspect (Ahmad & Cuenca, 2013; Jha, Hoda & Saini, 2008). On the contrary, when the ERP implementation is a failure, there is no framework available to the organization to indicate what parameters cause failure and what the quantitative loss to the organization is. The consequence of organizational change due to ERP system implementation results in tangible and intangible benefits to the organizations. Because ERP promises such potential benefits, understanding the costs and how to avoid them should be a research priority (Gattiker & Goodhue, 2000). It becomes essential for organizations and decision makers to identify, measure, and increment these benefits of ERP implementation (Ross, 1998).

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