The Influence of Organisational Size, Internal IT Capabilities, and Competitive and Vendor Pressures on ERP Adoption in SMEs

The Influence of Organisational Size, Internal IT Capabilities, and Competitive and Vendor Pressures on ERP Adoption in SMEs

Cliff Cartman (Manchester Metropolitan University, UK) and Angel Salazar (Manchester Metropolitan University, UK)
Copyright: © 2013 |Pages: 25
DOI: 10.4018/978-1-4666-2464-1.ch002
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Abstract

This empirical study investigates the influence of organisational size, internal IT capabilities and external factors, such as competitive and vendor pressure, on ERP adoption within SMEs. Existing research on ERP adoption has indentified some of the potential factors affecting SMEs, such as organisation size as one of the most significant ones. Yet none of this previous research has looked at organisational size, internal IT capabilities and external pressures in a unified framework and in context to SMEs. More specifically, this study focuses on the direct and moderating relationships which may affect an SME’s decision to adopt an ERP system. An analysis of a sample of 229 SMEs shows clear direct and moderating relationships amongst the above factors. Concrete recommendations are provided to accelerate the rate and success level of ERP adoption within SMEs.
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Introduction

Over the last decade, research on enterprise resource planning (ERP) systems has mainly focused on ERP implementation and post-implementation issues. Recent research has been carried out in an attempt to better understand the ERP selection and adoption process (Esteves & Pastor, 2001; Verville, 2000; Al-Mashari & Al-Mudimigh, 2003; Gable & Stewart, 1999; Nah et al., 2001; Okrent & Vokurka, 2004; Woo, 2007). These studies have, however, been focused primarily on larger enterprises with the exception of some case studies comparing large organisations and SMEs. These studies have demonstrated the rapid increase in ERP adoption within small and medium sized enterprises (SMEs) (Table 1), but have failed to identify which factors specifically affect ERP adoption within the SME market. Most studies conclude that SMEs exhibit significant different characteristics compared to larger enterprises and cannot be accurately evaluated in regards to ERP adoption.

Table 1.
ERP penetration in European SMEs
Year% of ERP penetration in
European SMEs
200027%
200135%
200239%
200340%
200440%
200542%
200648%
200751%
200855%
200956%

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