Abstract
The attention of software vendors has moved recently to SMEs (small- to medium-sized enterprises), offering them a vast range of enterprise systems (ES), which were formerly adopted by large firms only. From reviewing information technology innovation adoption literature, it can be argued that IT innovations are highly differentiated technologies for which there is not necessarily a single adoption model. Additionally, the question of why one SME adopts an ES while another does not is still understudied. This study intends to fill this gap by investigating the factors impacting SME adoption of ES. A qualitative approach was adopted in this study involving key decision makers in nine SMEs in the Northwest of England. The contribution of this study is twofold: it provides a framework that can be used as a theoretical basis for studying SME adoption of ES, and it empirically examines the impact of the factors within this framework on SME adoption of ES. The findings of this study confirm that factors impacting the adoption of ES are different from factors impacting SME adoption of other previously studied IT innovations. Contrary to large companies that are mainly affected by organizational factors, this study shows that SMEs are not only affected by environmental factors as previously established, but also affected by technological and organizational factors.
Chapter PDF
Similar content being viewed by others
Keywords
References
Agarwal, R., and Prasad, J. “The Role of Innovation Characteristics and Perceived Voluntariness in the Acceptance of Information Technologies,” Decision Sciences (28:3), 1997, pp. 557–582.
Ajzen, I. “The Theory of Planned Behavior,” Organizational Behavior and Human Decision Processes (50:2), 1991, pp. 179–211.
AMI-Partners. “The SMB Global Model,” Access Markets International Partners, Inc., New York, 2004 (http://www.ami-partners.com).
Anderson, J. E., and Schwager, P. H. “SME adoption of Wireless LAN Technology: Applying UTAUT Model,” in Proceedings of the 7 th Annual Conference of the Southern Association for Information Systems, 2003, pp. 39–43 (available online at http://sais.aisnet.org/sais2004/Anderson%20&%20Schwager.pdf).
Bandura, A. Social Foundations of Thought and Action: A Social Cognitive Theory, Englewood Cliffs, NJ: Prentice Hall, 1986.
Blackburn, R., and McClure, R. The Use of Information and Communication Technologies (ICTs) in Small Business Service Firms, Report to Midland Bank, Small Business Research Centre, Kingston Business School, London, UK, 1998.
Braun, P. “Digital Knowledge Networks: Linking Communities of Practice with Innovation,” Journal of Business Strategies (19:1), 2002, pp. 43–54.
Brock, J. K. “Information and Communication Technology in the Small Firm,” in D. Jones-Evans and S. Carter (eds.), Enterprise and Small Business: Principles, Practice and Policy, Harlow, UK: FT-Prentice Hall, 2000, pp. 384–408.
Buonanno, G., Faverio, P., Pigni, F., Ravarini, A., Sciuto, D., and Tagliavini, M. “Factors Affecting ERP System Adoption: A Comparative Analysis Between SMEs and Large Companies,” Journal of Enterprise Information Management (18:4), 2005, pp. 384–426.
Caldeira, M. M., and Ward, J. M. “Using Resource-Based Theory to Interpret the Successful Adoption and Use of Information Systems and Technology in Manufacturing Small and Medium-Sized Enterprises,” European Journal of Information Systems (12:2), 2003, pp. 127–141.
Chau, P. Y. K. “Inhibitors to EDI Adoption in Small Businesses: An Empirical Investigation,” Journal of Electronic Commerce Research (2:2), 2001, pp. 78–88.
Chau, P. Y. K., and Tam, K. Y. “Factors Affecting the Adoption of Open Systems: An Exploratory Study,” MIS Quarterly (21:1), 1997, pp. 1–24.
Corso, M., Martini, A., Paolucci, E., and Pellegrini, L. “Information and Communication Technologies in Product Innovation Within SMEs: The Role of Product Complexity,” Enterprise and Innovation Management Studies (2:1), 2001, pp. 35–48.
Cragg, P. B., and King, M. “Small-Firm Computing: Motivators and Inhibitors,” MIS Quarterly (17:1), 1993, pp. 47–60.
Damanpour, F. “Organizational Complexity and Innovation: Developing and Testing Multiple Contingency Models,” Management Science (42:5), 1996, pp. 693.
Daniel, E. M., and Grimshaw, D. J. “An Exploratory Comparison of Electronic Commerce Adoption in Large and Small Enterprises,” Journal of Information Technology (17:3), 2002, pp. 133–147.
Daniel, E. M., Wilson, H., and Myers, A. “Adoption of E-Commerce by SMEs in the UK: Towards a Stage Model,” International Small Business Journal (20:3), 2002, pp. 253–268.
Datamonitor. “CRM For Small to Medium Business,” 2004 (http://www.datamonitor.com).
Davenport, T. H. Mission Critical: Realizing the Promise of Enterprise Systems, Boston, MA: Harvard Business School Press, 2000.
Davis, F. D. “Perceived Usefulness, Perceived Ease of Use, and User Acceptance of Information Technology,” MIS Quarterly (13:3), 1989, pp. 319–340.
DTI. “Business in the Information Age: International Benchmarking Report,” Department of Trade and Industry, London, 2001.
DTI. “Business in the Information Age: International Benchmarking Study 2004, Department of Trade and Industry, London, 2004.
European Commission. “SME User Guide Explaining the New SME Definition,” Enterprise and Industry Directorate, Brussels, 2003 (available online at http://ec.europa.eu/enterprise/enterprise_policy/sme__definition/index_en.htm)
Feeny, D. F., and Willcocks, L. P. “Re-Designing the IS Function Around Core Capabilities,” Long Range Planning (31:3), 1998, pp. 354–367.
Fichman, R. G. “Going Beyond the Dominant Paradigm for Information Technology Innovation Research: Emerging Concepts and Methods,” Journal of the Association for Information Systems (5:8), 2004, pp. 314–355.
Fink, D. “Guidelines for the Successful Adoption of Information Technology in Small and Medium Enterprises,” International Journal of Information Management (18:4), 1998, pp. 243–253.
Fishbein, M., and Ajzen, I. Belief, Attitude, and Behavior: An Introduction to Theory and Research, Reading, MA: Addison-Wesley, 1975
Goode, S., and Stevens, K. “An Analysis of the Business Characteristics of Adopters and Non-Adopters of World Wide Web Technology,” Information Technology and Management (1:1–2), 2000, pp. 129–154.
Grandon, E. E., and Pearson, J. M. “Electronic Commerce Adoption: An Empirical Study of Small and Medium US Businesses,” Information and Management (42:1), 2004, pp. 197–216.
Grewal, R. “An Investigation into the Antecedents of Organizational Participation in Business-to-Business Electronic Markets,” Journal of Marketing (65:3), 2001, pp. 17–33.
Guinea, A. O., Kelley, H., and Hunter, M. G. “Information Systems Effectiveness in Small Businesses: Extending a Singaporean Model in Canada,” Journal of Global Information Management (13:3), 2005, pp. 55–79.
Hambrick, D. C. “Specialization of Environmental Scanning Activities among Upper Level Executives,” Journal of Management Studies (18:3), 1981, pp. 299–320.
Hamel, G. “The Challenge Today: Changing the Roles of the Game,” Business Strategy Review (9:2), 1998, pp. 19–26.
Harrison, A. D., Mykytyn Jr., P. P., and Riemenschneider, K. C. “Executive Decision About Adoption of Information Technology in Small Business: Theory and Empirical Tests,” Information Systems Research (8:2), 1997, pp. 171–195.
Iacovou, C. L., Benbasat, I., and Dexter, A. S. “Electronic Data Interchange and Small Organizations: Adoption and Impact of Technology,” MIS Quarterly (19:4), 1995, pp. 465–485.
Igbaria, M., and Tan, M. “The Consequences of Information Technology Acceptance on Subsequent Individual Performance,” Information and Management (32:3), 1997, pp. 113–121.
Igbaria, M., Zinatelli, N., Cragg, P., and Cavaye, A. L. M. “Personal Computing Acceptance Factors in Small Firms: A Structural Equation Model,” MIS Quarterly (21:3), 1997, pp. 279–302.
Jeyaraj, A., Rottman, J. W., and Lacity, M. C. “A Review of the Predictors, Linkages, and Biases in IT Innovation Adoption Research,” Journal of Information Technology (21:1), 2006, pp. 1–23.
Kagan, A., Lau, K., and Nusgart, K. R. “Information System Usage Within Small Business Firms,” Entrepreneurship: Theory and Practice (14:3), 1990, pp. 25–37.
Kuan, K. K. Y., and Chau, P. Y. K. “A Perception-Based Model for EDI Adoption in Small Businesses Using a Technology-Organization-Environment Framework,” Information and Management (38:8), 2001, pp. 507–521.
Kwon, T. H., and Zmud, R. W. “Unifying the Fragmented Models of Information Systems Implementation,” in R. J. Boland and R. A. Hirschheim (eds.), Critical Issues in Information Systems Research, New York: John Wiley and Sons, 1987, 227–251.
Lang, J. R., and Calantonc, R. J. “Small Firm Information Seeking as a Response to Environmental Threats and Opportunities,” Journal of Small Business Management (35:1), 1997, pp. 11–23.
Lee, J. “Discriminant Analysis of Technology Adoption Behavior: A Case of Internet Technologies in Small Businesses,” Journal of Computer Information Systems (44:4), 2004, pp. 57–66.
Lertwongsatien, C., and Wongpinunwatana, N. “E-Commerce Adoption in Thailand: An Empirical Study of Small and Medium Enterprises (SMEs),” Journal of Global Information Technology Management (6:3), 2003, pp. 67–83.
Levenburg, N., Magal, S. R., and Kosalge, P. “An Exploratory Investigation of Organizational Factors and E-Business Motivations Among SMFOEs in the US,” Electronic Markets (16:1), 2006, pp. 70–84.
Levenburg, N. M., and Klein, H. A. “Delivering Customer Services Online: Identifying Best Practices of Medium-Sized Enterprises,” Information Systems Journal (16:2), 2006, pp. 135–155.
Levy, M., and Powell, P. “Exploring SME Internet Adoption: Towards a Contingent Model,” Electronic Markets (13:2), 2003, pp. 173–181.
Levy, M., Powell, P., and Yetton, P. “The Dynamics of SME Information Systems,” Small Business Economics (19:4), 2001, pp. 341–354.
Levy, M., Powell, P., and Yetton, P. “SMEs: Aligning IS and the Strategic Context,” Journal of Information Technology (16:3), 2001, pp. 133–144.
Lockett, N., Brown, D. H., and Kaewkitipong, L. “The Use of Hosted Enterprise Applications by SMEs: A Dual Market and User Perspective,” Electronic Markets (16:1), 2006, pp. 85–96.
Markus, M. L., and Tanis, C. “The Enterprise System Experience-From Adoption to Success,” in R. W. Zmud (ed.), Framing the Domain of IT Management: Projecting the Future... Through the Past, Cincinnati, OH: Pinnaflex Educational Resources, Inc., 2000, pp. 173–207.
Martin, L. M., and Matlay, H. “‘Blanket’ Approaches to Promoting ICT in Small Firms: Some Lessons from the DTI Ladder Adoption Model in the UK,” Internet Research: Electronic Networking Applications and Policy (11:1), 2001, pp. 399–410.
Mata, F. J., Fuerst, W. L., and Barney, J. B. “Information Technology and Sustained Competitive Advantage: A Resource-Based Analysis,” MIS Quarterly (19:4), 1995, pp. 487–505.
Mehrtens, J., Cragg, P. B., and Mills, A. M. “A Model of Internet Adoption by SMEs,” Information and Management (39:3), 2001, pp. 165–176.
Miles, M. B., and Huberman, M. A. Qualitative Data Analysis: An Expanded Sourcebook (2nd ed.), London: Sage Publications, 1994.
Montazemi, A. R. “Factors Affecting Information Satisfaction in the Context of the Small Business Environment,” MIS Quarterly (12:2), 1988, pp. 238–256.
Moore, G. C., and Benbasat, I. “Development of an Instrument to Measure the Perceptions of Adopting an Information Technology Innovation,” Information Systems Research (2:3), 1991, pp. 192–222.
Pearce, I. J. A., Chapman, B. L., and David, F. R. “Environmental Scanning for Small and Growing Firms,” Journal of Small Business Management (20:3), 1982, pp. 27–34.
Poon, S., and Swatman, P. M. C. “Small Business Use of the Internet: Findings From Australian Case Studies,” International Marketing Review (14:5), 1997, pp. 385–402.
Prananto, A., Marshall, P., and McKay, J. “A Study of the Progression of E-Business Maturity in Australian SMEs: Some Evidence of the Applicability of the Stages of Growth for E-Business Model,” in M. Hiller, D. Falconer, J. Hanish, and S. Horrocks (eds.), Proceedings of the 7 th Pacific Asia Conference on Information Systems (PACIS), Adelaide, South Australia, 2003.
Premkumar, G. “A Meta-Analysis of Research on Information Technology Implementation in Small Business,” Journal of Organizational Computing and Electronic Commerce (13:2), 2003, pp. 91–121.
Premkumar, G., and King, W. R. “Organizational Characteristics and Information Systems Planning: An Empirical Study,” Information Systems Research (5:2), 1994, pp. 75–109.
Premkumar, G., and Roberts, M. “Adoption of New Information Technologies in Rural Small Businesses,” Omega (27:4), 1999, pp. 467–484.
Rao, S. S., Metts, G., and Mora, M. C. A. “Electronic Commerce Development in Small and Medium Sized Enterprises: A Stage Model and its Implications,” Business Process Management (9:1), 2003, pp. 11–32.
Raymond, L. “Determinants of Website Implementation in Small Businesses,” Internet Research (11:5), 2001, pp. 411–422.
Raymond, L. “Management Information Systems: Problems and Opportunities,” International Small Business Journal (7:4), 1989, pp. 44–53.
Reich, B. H., and Benbasat, I. “An Empirical Investigation of Factors Influencing the Success of Customer Oriented Strategic Systems,” Information Systems Research (1:3), 1990, pp. 325–347.
Riemenschneider, K. C., Harrison, A. D., and Mykytyn Jr., P. P. “Understanding IT Adoption Decisions in Small Business: Integrating Current Theories,” Information and Management (40:4), 2003, pp. 269–285.
Rogers, E. M. Diffusion of Innovations (3rd ed.), New York: Free Press, 1983.
Rogers, E. M. Diffusion of Innovations (4th ed.), New York: Free Press, 1995.
Rogers, E. M. Diffusion of Innovations (5th ed.), New York: Free Press, 2003.
SBS. “Statistical Press Release,” DTI News Release, August 31, 2006 (http://www.sbs.gov.uk/SBS_Gov_files/researchandstats/SMEstats2005pr.pdf).
Scupola, A. “The Adoption of Internet Commerce by SMEs in the South of Italy: An Environmental, Technological and Organizational Perspective,” Journal of Global Information Technology Management (6:1), 2003, pp. 52–71.
Shang, S., and Seddon, P. B. “Assessing and Managing the Benefits of Enterprise Systems: The Business Manager’s Perspective,” Information Systems Journal (12:4), 2002, pp. 271–299.
Shiels, H., McIvor, R., and O’Reilly, D. “Understanding the Implications of ICT Adoption: Insights from SMEs,” Logistics Information Management (16:5), 2003, pp. 312–326.
Simpson, M., and Docherty, A. J. “E-Commerce Adoption Support and Advice for UK SMEs,” Journal of Small Business and Enterprise Development (11:3), 2004, pp. 315–328.
Southern, A., and Tilley, F. “Small Firms and Information and Communication Technologies (ICTs): Toward a Typology of ICTs Usage,” New Technology, Work and Employment (15:2), 2000, pp. 138–154.
Story, D. Understanding the Small Business Sector, London, UK: Routledge, 1994.
Swanson, E. B. “Information Systems Innovation Among Organizations,” Management Science (40:9), 1994, pp. 1069–1092.
Taylor, M., and Murphy, A. “SMEs and E-Business,” Journal of Small Business and Enterprise Development (11:3), 2004, pp. 280–289.
Thong, J. Y. L. “An Integrated Model of Information Systems Adoption in Small Businesses,” Journal of Management Information Systems (15:4), 1999, pp. 187–214.
Thong, J. Y. L. “Resource Constraints and Information Systems Implementation in Singaporean Small Businesses,” Omega (29:2), 2001, pp. 143–156.
Thong, J. Y. L., and Yap, C. S. “CEO Characteristics, Organizational Characteristics and Information Technology Adoption in Small Businesses,” Omega (23:4), 1995, pp. 429–442.
Thong, J. Y. L., Yap, C. S., and Raman, K. S. “Engagement of External Expertise in Information Systems Implementation,” Journal of Management Information Systems (11:2), 1994, pp. 209–231.
Tornatzky, L. G., and Fleischer, M. The Process of Technological Innovation, Lexington, MA: Lexington Books, 1990.
Venkatesh, V., and Davis, F. D. “A Theoretical Extension of the Technology Acceptance Model: Four Longitudinal Field Studies,” Management Science (46:2), 2000, pp. 186–204.
Venkatesh, V., Morris, M. G., Davis, G. B., and Davis, F. D. “User Acceptance of Information Technology: Toward a Unified View,” MIS Quarterly (27:3), 2003, pp. 425–478.
Volkoff, O., Strong, D. M., and Elmes, M. B. “Understanding Enterprise Systems-Enabled Integration,” European Journal of Information Systems (14:2), 2005, pp. 110–120.
Ward, J., and Peppard, J. Strategic Planning for Information Systems, Chichester, UK: John Wiley and Sons, 2002.
Yap, C. S. “Distinguishing Characteristics of Organizations Using Computers,” Information and Management (18:2), 1990, pp. 97–107.
Yin, R. Case Study Research: Design and Methods, Newbury Park, CA: Sage Publications, 1994.
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2007 International Federation for Information Processing
About this paper
Cite this paper
Ramdani, B., Kawalek, P. (2007). SME Adoption of Enterprise Systems in the Northwest of England. In: McMaster, T., Wastell, D., Ferneley, E., DeGross, J.I. (eds) Organizational Dynamics of Technology-Based Innovation: Diversifying the Research Agenda. TDIT 2007. IFIP International Federation for Information Processing, vol 235. Springer, Boston, MA. https://doi.org/10.1007/978-0-387-72804-9_27
Download citation
DOI: https://doi.org/10.1007/978-0-387-72804-9_27
Publisher Name: Springer, Boston, MA
Print ISBN: 978-0-387-72803-2
Online ISBN: 978-0-387-72804-9
eBook Packages: Computer ScienceComputer Science (R0)