Critical Factors of ERP Adoption for Small- and Medium- Sized Enterprises: An Empirical Study

Abstract

Small and Medium-sized Enterprises SMEs play a vital and pervasive role in the current development of Taiwan's economy. Recently, the application of Enterprise Resource Planning ERP systems have enabled large enterprises to have direct contact with their clients via e-commerce technology, which has led to even fiercer competition among the SMEs. This study develops and tests a theoretical model including critical factors which influence ERP adoption in Taiwan's SMEs. Specifically, four dimensions, including CEO characteristics, innovative technology characteristics, organizational characteristics, and environmental characteristics, are empirically examined. The results of a mail survey indicate that the CEO's attitude towards information technology IT adoption, the CEO's IT knowledge, the employees' IT skills, business size, competitive pressure, cost, complexity, and compatibility are all important determinants in ERP adoption for SMEs. The authors' results are compared with research on IT adoption in SMEs based in Singapore and the United States, while implications of the results are also discussed.