A model of adoption determinants of ERP within T-O-E framework

The purpose of this paper is to attempts to provide further insight into IS adoption by investigating how 12 factors within the technology-organization-environment framework explain small- and medium-sized enterprises’ (SMEs) adoption of enterprise resource planning (ERP) software.

The approach for data collection was questionnaire survey involving executives of SMEs drawn from six fast service enterprises with strong operations in Port Harcourt. The mode of sampling was purposive and snow ball and analysis involves logistic regression test; the likelihood ratios, Hosmer and Lemeshow’s goodness of fit, and Nagelkerke’s R² provided the necessary lenses.

The 12 hypothesized relationships were supported with each factor differing in its statistical coefficient and some bearing negative values. ICT infrastructures, technical know-how, perceived compatibility, perceived values, security, and firm’s size were found statistically significant adoption determinants. Although, scope of business operations, trading partners’ readiness, demographic composition, subjective norms, external supports, and competitive pressures were equally critical but their negative coefficients suggest they pose less of an obstacle to adopters than to non-adopters. Thus, adoption of ERP by SMEs is more driven by technological factors than by organizational and environmental factors.

The study is limited by its scope of data collection and phases, therefore extended data are needed to apply the findings to other sectors/industries and to factor in the implementation and post-adoption phases in order to forge a more integrated and holistic adoption framework.

The model may be used by IS vendors to make investment decisions, to meet customers’ needs, and to craft informed marketing programs that would appeal to actual and potential adopters and cause them to progress in the customer loyalty ladder.

The paper contributes to the growing research on IS innovations’ adoption by using factors within the T-O-E framework to explains SMEs’ adoption of ERP.