Predicting SMEs' adoption of enterprise systems

Abstract

Purpose – The purpose of this paper is to develop a model that can be used to predict which small to medium-sized enterprises (SMEs) are more likely to become adopters of enterprise systems (ERP, CRM, SCM and e-procurement). Design/methodology/approach – Direct interviews were used to collect data from a random sample of SMEs located in the Northwest of England. Using logistic regression, 102 responses were analysed. Findings – The results reveal that the factors influencing SMEs' adoption of enterprise systems are different from the factors influencing SMEs' adoption of other previously studied information systems (IS) innovations. SMEs were found to be more influenced by technological and organisational factors than environmental factors. Moreover, the results indicate that firms with a greater perceived relative advantage, a greater ability to experiment with these systems before adoption, greater top management support, greater organisational readiness and a larger size are predicted to become adopters of enterprise systems. Research limitations/implications – Although this study focused on the factors that influence SMEs' adoption of a set of enterprise systems (i.e. ERP, CRM, SCM and e-procurement), it fails to differentiate between factors that influence each of these systems. Practical implications – The model can be used to assist software vendors not only to develop marketing strategies that can target potential adopters, but also to develop strategies to increase the adoption of ES among SMEs. Originality/value – The paper contributes to the continuing research in IS innovations adoption/diffusion in the small business context.