Parag Uma Kosalge and Elizabeth Ritz
Most small- and medium-sized enterprises use some business management software to manage day-to-day operations. Eventually they consider transitioning to an enterprise resources…
Abstract
Purpose
Most small- and medium-sized enterprises use some business management software to manage day-to-day operations. Eventually they consider transitioning to an enterprise resources planning (ERP) system. The purpose of this paper is to find what motivates the top management to consider a transition from an existing system to an ERP especially as such a transition can be painful, expensive, and involve considerable business risk. The research posits a decision model that top management may use to aid their decision.
Design/methodology/approach
The research question is about examining the organizational phenomenon of transition to an ERP system and so a case study research methodology is followed to understand the phenomenon.
Findings
The research concludes it is usually a change in scale of operations that drives the transition. The motivators are abstracted as: scalability – increased hierarchical controls and systems scalability driven by increasing number of employees; complexity – more business functions need systems support to address increased operational complexity; and integration – systems and process integration for seamless operations.
Research limitations/implications
There is a need to check if the same fundamental issue of change in scale of operations is true across industries and across geographies. Also it creates a need for a statistical validation of the motivators and their importance across organizations and industries.
Practical implications
ERP considerations are of strategic importance because of the high risk and the high expense. The research presents a decision model to aid top management to find if ERP systems make sense for their organization.
Originality/value
The research provides new directions for academicians as there are few empirical studies on the true motivators that drive ERP adoption.
Details
Keywords
Simha R. Magal, Parag Kosalge and Nancy M. Levenburg
E‐business adoption among small and medium‐sized enterprises (SMEs) has been limited because of resource constraints and a failure to understand the strategic value of e‐business…
Abstract
Purpose
E‐business adoption among small and medium‐sized enterprises (SMEs) has been limited because of resource constraints and a failure to understand the strategic value of e‐business. To facilitate decision making concerning e‐business applications and their implementation, simple, low cost tools are needed to assist in analyzing and developing effective e‐business strategies. This paper aims to evaluate the use of e‐business applications among SMEs, to test the robustness of importance‐performance (IP) analysis models and to present IP mapping as a resource/tool for decision making.
Design/methodology/approach
A total of 19 e‐business motivations were identified from the literature and incorporated into a self‐administered survey questionnaire. Data were collected from 439 SMEs located throughout the US.
Findings
Most IP studies have assumed that importance and performance are independent; however, three recent studies have argued otherwise, identifying positive, negative and v‐shaped relationships. The study finds a fourth, N‐shaped relationship between importance and performance. This is an extension of the v‐shaped relationship and appears when the full range of performance scale values is displayed.
Research limitations/implications
The relationship between the “importance” and “performance” variables suggests a path of travel that can help show the e‐business adoption states and the possible undulations in e‐business strategies along the path. Firms can identify their location on an IP map relative to the N‐shaped path and then identify the path to the optimum location on the map.
Originality/value
This paper should be useful for academic researchers and business practitioners seeking guidance in terms of which e‐business applications to adopt and implement.