Could enterprise resource planning create a competitive advantage for small businesses?

Abstract

Purpose

This paper seeks to show how enterprise resource planning (ERP) could create a competitive advantage for small‐ and medium‐sized enterprises (SMEs).

Design/methodology/approach

The main methods used in this study were questionnaires and interviews based on the application of an uncertainty diagnosing business model. Data were collected, using a questionnaire administrated to 126 SMEs, in the form of percentage contributions of the underlying causes of uncertainty (structured in the business model) on product late delivery. Analysis of Variance (ANOVA) was carried out in SPSS to analyse the effects of the underlying causes of uncertainty in SMEs.

Findings

ERP could create a competitive advantage in delivery for SMEs by being responsive and agile to change, but not to uncertainty. Results suggested that only a few features in an ERP system were used to deal with change due to uncertainty. It was found that SMEs generally use their ERP system to generate a plan for production and use it as a guideline. SMEs concurrently use a range of buffering or dampening techniques to tackle uncertainty for crating a competitive advantage in delivery.

Research limitations/implications

The application of the business model in SMEs has provided useful knowledge to make‐to‐stock (MTS), make‐to‐order (MTO) and mixed‐mode (MM) manufacturing enterprises in which underlying causes of uncertainty were significantly affecting their product late delivery performance.

Originality/value

This is a highly original application of an uncertainty diagnosing business model to SMEs using ERP systems.

Citation

Lenny Koh, S.C. and Simpson, M. (2007), "Could enterprise resource planning create a competitive advantage for small businesses?", Benchmarking: An International Journal, Vol. 14 No. 1, pp. 59-76. https://doi.org/10.1108/14635770710730937