Finding the tipping point for a CEO to say yes to an ERP: a case study

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.

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.

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.

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.

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.

The research provides new directions for academicians as there are few empirical studies on the true motivators that drive ERP adoption.