A technology diffusion perspective of Enterprise Resource Planning across European Small and Medium Enterprises: from determinants to Use to Value

Tese apresentada como requisito parcial para obtenção do grau de Doutor em Gestão de Informação

There is a great interest among researchers and practitioners in information systems (IS) value. This is particularly important in cases of systems such as enterprise resource planning (ERP), as the use of these systems involves significant investment. This dissertation focuses on ERP post-adoption stages that build the foundation for a firm gain a competitive advantage to improve firms’ performance. It consists of four inter-related chapters to investigate the determinants of ERP use and value among European small and medium enterprises (SMEs). In Chapter 2, drawing upon theories on the process and contexts of information technology (IT) we aim to explain ERP post-adoption impact on firms’ performance. Grounded on the diffusion of innovation (DOI) literature we hypothesize how compatibility, complexity, efficiency, best-practices, training, and competitive pressure explain ERP use. Based on the resource-based view (RBV) theory we hypothesize how ERP use, collaboration and analytics explain ERP value and its consequences on Portuguese SMEs performance. Through structural equation modelling, a data set of 134 web-surveyed firms is used to test the nine hypotheses. Our empirical analysis leads to three main findings: 1) System compatibility, best-practices, complexity, and efficiency are more important determinants for ERP use than training and competitive pressure, suggesting that technological product characteristics are the main drivers of ERP use among Portuguese SMEs. 2) Similarly, collaboration and analytics are more important for ERP value upon use, suggesting that integrative characteristics are the main drivers of ERP value. 3) For Portuguese SMEs the mostly valued metric attained through ERP is management control. In Chapter 3, we investigate the above integrative model in a different context and compared two countries (Portugal and Spain). Testing was conducted through structural equation modelling, utilizing data from 558 web-surveyed firms, leading to three main outcomes: 1) Full sample analysis finds that competitive pressure, training, best-practices, compatibility, and efficiency are important antecedents of ERP use. Together with usage, collaboration and analytics capabilities contribute to ERP value. Cross-country analysis reveals that complexity is an important inhibitor for ERP use in Portuguese firms whereas it is a facilitator for Spanish firms. 2) While for Portuguese firms, compatibility and efficiency are significant, they are not for Spanish. For ERP value, while use and collaboration are more important for Portuguese firms, analytics is more important for Spanish. 3) Whereas approximately 70% of Portuguese firms responded that they had been using ERP for less than five years, while Spanish firms expressed only 40%. In Chapter 4, grounded on the previous studies we made an effort to understand and measure the differences and similarities between two cultural disparate regions (Iberian vs Scandinavian). We assess the ERP use and value by using 883 SMEs surveyed, leading to four main outcomes: 1) Whereas for both regions, competitive pressure, efficiency, and best-practices are important factors to use ERP, analytics and collaboration are important factors for ERP value. 2) Whereas complexity and training are not relevant for ERP use among Scandinavian SMEs, they are facilitators for Iberian firms. 3) Whereas 65.1% of Scandinavian SMEs have used ERP for more than 5 years, 55.0% of Iberian SMEs have use it for less than 5 years. 4) Whereas for Scandinavian SMEs user satisfaction is considered as the important indicator of ERP value, for Iberian SMEs management control has the highest importance. In Chapter 5, we investigate the ERP system capabilities effect of ERP value among different commercial products. Using a data set of 883 firms from Portugal, Spain, Denmark and Sweden, we assessed three determinants of ERP value based on the RBV and evidenced differences and similarities among top four commercial ERP packages (Microsoft NAV, SAP All-in-one, ORACLE JDE and SAGE X3). Our empirical analysis leads to three main outcomes: 1) Whereas for Dynamics and ORACLE the most important factor is analytics system capability, for SAP and SAGE it is the greater collaboration system capability. 2) Furthermore, for SAP and ORACLE greater ERP use is perceived as an important factor, but not for Dynamics and SAGE. 3) Furthermore both collaboration and analytics capabilities are the greater differentiators to ERP value. The research was informed by contextualist theory to organize our proposed research model. In epistemological terms, we adopted a posture characteristic of positivism. With regard to research methodologies we used the deductive method. With this dissertation we intend to contribute to a better understanding of the determinants of ERP use and value at firm level. Unlike the typical focus on ERP adoption found in the literature, these studies focuses on post-adoption stages, linking actual use with value. This is the first empirical theoretically grounded research studying ERP across European SMEs, thus adding an international dimension to the IS literature, as well moving beyond dichotomous “adoption versus non-adoption”, and how firms find value from the top four commercial-packaged ERPs adding a real-world dimension the IS literature.