Abstract

ERP systems are now offered on the cloud under Software as a Service (SaaS) model. For small and medium sized enterprises (SMEs), this is considered the best opportunity to take advantage of the capabilities of an Enterprise Resource Planning (ERP) system without the investment and management costs associated with the on-premise model. This study investigates the factors influencing the adoption of SaaS ERP system by SMEs. Using a cross-sectional field study conducted across four major case study organizations and software vendors, this study identifies the determinants for the adoption decision and analyses benefits and challenges. According to study, low total cost of ownership, low initial investment costs, potential willingness of the vendor to participate in co-creation of value for customers, continuous improvement of the product offerings and generic benefits of implementing an integrated ERP system are determinants of SaaS ERP adoption decisions by SMEs. Competitive pressures faced by the enterprise, external factors, concerns on the security and integrity of data have no influence on adoption decision, according to this study. Instead, SaaS ERP vendor’s long term reputation, promised shorter deployment time, total cost of ownership, willingness to listen and continuously improve the product, vendor’s ability and willingness to support customers throughout the product life cycle are the factors that would attract SMEs towards SaaS ERP systems.

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