Investigating the point of readiness for manufacturing SMEs to implement an Enterprise Resource Planning system

Abstract

Small and medium enterprises (SMEs) play a very important role in the economy and the global economy, contributing to economic growth and job creation. Still, they are constantly receiving pressure to compete with constrained resources. Enterprise resource planning (ERP) systems are known to improve business performance. Unfortunately, the adoption of a proprietary ERP system is coming at great costs which are draining the financial resources of SMEs. Most SMEs do not know how to properly implement such a system as well as to properly make use of all the benefits. SMEs find it difficult to determine their point of readiness to implement an ERP system considering the large costs of implementation and the change it will bring to the company. Due to a variety of different implementation options available, deciding which ERP system to implement becomes even more difficult. However, with easier guidelines to determine their readiness point will be beneficial. The adoption of open-source ERP systems is presenting the opportunity for SMEs to overcome the cost factor. The use of open-source software has increased in the past few years and the use of open-source ERP systems. Open source is offering the same functions as proprietary systems but with no purchase value. Unfortunately, it does not remove the implementation costs but is still much more affordable. Still, the adoption of open-source ERP systems is extremely low among SMEs considering the huge benefits they are offering. Therefore, the technology of open-source ERP systems is available to SMEs to improve their business processes and improve their competitiveness. A qualitative methodology was used in conducting this research with an interpretivist research paradigm. Semi-structured interviews were used in collecting the data for this study and were analysed and coded using an inductive approach. For this study, to determine the readiness point for SMEs to implement an ERP system, it was important

to look at all the factors associated with ERP implementation. These included looking at the benefits, challenges, barriers to adoption, forces to adoption and the critical success factors. This field of study to determine the readiness point has not been thoroughly explored which is specifically focussing on the SME sector.